According to the latest Rabobank Sugar Quarterly report, abundant global sugar supplies have been steadily accumulating after four years of a production surplus, leading to the decline in global prices. Main import destinations like China and Indonesia have abundant stocks and are wary about importing more sugar in 2015, after seeing domestic prices collapse. Rabobank forecasts a global sugar production deficit of 0.7 million tonnes raw sugar for the season.
"Sugar stock levels are high at both origin and destination. Lack of import demand, despite falling international sugar prices, reflects high stockpiles at destination, this in turn is resulting in a large build-up of stocks at origin,” says Rabobank Sugar Analyst Yong Chang Jian.
Main exporting countries’ currencies are depreciating against the US dollar. Producers from main-producing countries like Brazil and Australia are willing to sell at lower future prices that are denominated in a strengthening US dollar.
Tighter import regulations by governments in main destinations like China and Indonesia have led to the reining in of raw sugar imports from refiners in these countries.
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Yong Chang JianChangJian.Yong@rabobank.com
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