Tag Archives: sugar exports

More on the EU decision to sell 500,000 tonnes of out of quota sugar

The European Commission has approved the sale of 500,000 tonnes of out of quota sugar within the EU.  The additional levy of Euro 500 that usually applies to out of quota sugar will not apply.

EU quota sugar is approximately 13.9 million tones.  EU consumption is approximately 16.5 million. EU exports and imports account for the difference. Some out of quota sugar can be exported while the remainder is sold either to industry or as food.  The additional levy is applied when out of quota sugar is sold as food.

Starting stocks plus in quota sugar plus imports are meant to cover EU consumption but high world sugar prices have made sugar imports difficult.

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Sugar lineup increases in Brazil

The existing lineup of ships in Brazilian ports stands at 18  up from 16. The ships are listed to ship 500,002 tonnes of sugar from Brazil up from 470,000 last week as the 2010/11 comes to an end.  The line up at Santos is currently the largest with 245,000 tonnes scheduled to leave the port.

Russian raw sugar imports down for 2011

Russian raw sugar imports are expected to be down for 2011 to 1.9 million tonnes from 2.1 million tonnes in 2010.  Domestic production of beet sugar is likely to be at a historical high in the region of 4.2 million tonnes.  Russia recently decided to cut tariffs on raw sugar imports to $50 effective from March. A move that may see a temporary slowing in imports until the tariff becomes effective.

High domestic beet sugar production may result in imports slowing in the second half of the year when further downward pressure on domestic prices is expected.

EU to permit out of quota sugar imports

The EU is to permit sugar imports over and above the national quotas set for EU states.  Raw and white sugar is to be authorised for import under reduced duty.  A tender is likely to be announced shortly specifying the quantity of sugar to be imported. Although it is expected that the EU may authorise the import of approximately 500,000 tonnes of out of quota sugar.

The usual 500 Euro per tonne duty on this out of quota sugar will not apply. The decision is not yet EU policy but is expected to be announced shortly.

Raw sugar futures in 10% drop

Profit taking following the rallies of the past few days and price spikes has resulted in raw sugar futures dropping by almost 10% closing at 32.04 cents per lb.  Near month white sugar futures were also down by $30 to close at $814.20 per tonne.

The overall sentiment beyond the spring, subject to no significant supply/weather changes, is bearish. An improved outlook for Brazil’s center south which may be forecast to crush more cane than forecast is adding downward sentiment concerning prices.  The improved outlook for the centre south due to recent rains after poor weather earlier and the possibility of improved supply forecasts elsewhere, such as under India’s OGL, raises the prospect of offsetting any negative impacts and losses resulting from cyclone Yasi.

Australian cane damage at over 1.5 million tonnes

Early indications are that cyclone Yasi has damaged between 5% to 15% of Australia’s crop. Meaning that approximately between 1.5 to 5 million tonnes of cane may be affected.  Queensland Cane Growers Association stated that up to 50% of Queensland’s crop may have been damaged.  It remains to be seen how much cane has been only damaged and how much has been destroyed with no possibility of recovery.  Depending on the cane lost we could still be looking at sugar production not far off 2010 figures. Namely 3.6 million tonnes.

However, Some farmers have lost their entire crop and others may have the harvest of future years impacted negatively depending on whether uprooting of the crop has taken place, which may be unlikely.  It is too early for a complete analysis.

Sugar futures fell slightly today when markets opened.  This was more likely a correction from yesterday’s price spikes rather than relief concerning Yasi or supply issues. Nevertheless, despite Yasi, India’s export position and other potential supply risks sugar futures may face resistance on the up side, at least in the second quarter of 2011 as growers move to plant more  cane to benefit from increased prices.

25% of Australia’s sugar crop at risk

Queensland, where 90% of Australia’s sugar crop is grown is likely to face cyclone Yasi shortly.  Queensland Cane Growers association announced that at least a couple of districts would be affected, falling in the expected path of cyclone Yasi.  A threat exists to 25% of Australia’s sugar crop or over 8 million tonnes.

Sugar futures are down following rallies to near 30 year highs last week.  However, supply is tight and provides support to prices despite raw sugar futures correcting by 4%.  The cyclone and uncertainty over the size of Indian exports continue to ensure supply tightness.