01 June 2004 00:51
Markets await Russia sugar export projection volume
Section: Business News - The Cane and Sugar Office said it is too early to foresee the movement of sugar prices in
the global market, with Russia yet to come up with its export projection volume this year.
Secretary general Nattapol Natasomboon said Russia exports at least one million tonnes of sugar annually. But this
year, industry observers are unsure on how much sugar Russia will export.
A few months ago, the price of sugar in the world market stood at 7.1-7.2 cents per pound. But it currently averages
6.6-6.7 cents per pound, he said.
Sugar has declined, since a number of exporting countries are believed to be shipping sugar in excess of their export
quotas, causing the price to fall, he added.
Thailand has already exported 600,000 tonnes of its total sugar export quota of 800,000 this year, he said
Nattapol.
As a result of the decline in the price of sugar, Nattapol said his office will revise its original projections
slightly.
Meanwhile, commodities broker Sucden (UK) forecast a jump in prices as bad weather has hampered new harvests in
southern Brazil. Rising fuel prices have also led to increased demand for ethanol.
These developments follow reductions in beet acreage in the EU and lower crop expectations from producers, such as
Thailand and India, according to Sucden, a unit of France's Sucres et Denrees. Also, India may lower or remove
import duties, adding to higher prices.
"Persistent rain and cold weather in south Brazil has hindered the new harvest and raised concerns about the
health of around 10 percent of the 320 million metric tonnes of cane estimated to be produced this year," Sucden
chief sugar trader Doug Nicolson said in an e-mailed statement.
Rising fuel prices have also boosted Brazilian ethanol demand, both for a growing number of domestic flex-fuel cars
and for export. This has had the effect of reducing sugar output by one million metric tonnes, Nicolson said.
India has stopped financing so-called buffer stocks, a sign that the tariffs of 60 percent on imported sugar may be
lowered or lifted, according to Sucden. India's own current crop has been "poor", the broker said.
If India removes all or part of this duty, "the world sugar market is quite likely to jump $20-$40" per
metric tonne from the current $216.3 per metric tonne for August delivery on the London market, Nicolson predicts.
This is because the shortfall is too much to be shipped in a quarter. "The perceived shortfall and potential
import quantity is over four million metric tonnes, some say six million metric tonnes, and this kind of tonnage is too
large to be shipped in any one shipping quarter," he said.
"World sugar prices have short-term as well as long-term possibilities of re-valuing to more historical levels
between eight and 10 cents per pound from the present values of 6.5-7 cents per pound," Nicolson added.
[Thai Press Reports] |
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