The global sugar market has been trending downwards on the back of the persistent abundance of stocks, aggravated by a strong seasonal mismatch between export availability and import demand. There is no indication at the moment of how low sugar prices can go in the absence of any supportive developments, according to the latest Rabobank Sugar Quarterly report.
Highlights from the Rabobank Sugar Quarterly:
“This year’s final production from India and Thailand caught most of the industry by surprise, further highlighting just how precarious surplus/deficit predictions can be,” says Rabobank analyst Yong Chang Jian.
At current prices, it will not be easy for producers to accept that levels could fall even lower. However, should the 2015/16 crop do better than initially forecast, we could very well see prices trending even lower.
“The market might be paying for the cost of carry, but at some point in time, producers and exporters can no longer kick the can down the road and will eventually be forced to sell any accumulated stocks,” says sugar analyst Yong Chang Jian.
El Niño already factored in
Weather-forecasting agencies around the globe have once again predicted a possibility of an El Niño event this year. US, Japanese and Australian weather bureaus have placed a 50% to 70% probability of the weather event happening. This is not news to the market, having heard about it for over a year now, and there is much debate as to what extent the weather risk has not been priced into the market, says the Rabobank Sugar Quarterly report.
For more information please contact the report’s author:
Yong Chang JianChangJian.Yong@rabobank.com Tel: +6562306742
For other information, please contact Rabobank press office:
Madelon Kaspers, Madelon.Kaspers@Rabobank.com, Tel: +31 (0) 610 8872 44
For your social media ready version of this press release:
Follow us on Twitter:
The report/presentation attached is sent specifically to enable journalists to do their work, i.e. as the basis for an article or news report, or as preparation for a telephone or personal interview with a content expert. In line with good journalistic practice, a reference to the source would be appreciated
Please note that is it expressly forbidden to forward the attached report/presentation in any form to third parties, or to publish this report either partially or entirely on a website.
Rabobank has recently updated the distribution lists for Food & Agribusiness Research reports. If you have no interest in further receiving this information, please let us know and we will remove your email address promptly.