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QSL Weekly Sugar Market Report

Raw Sugar Prices:

Overview: It was a volatile and exciting week for raw sugar ICE 11 prices which whipsawed across a 100 point range and reached life-of-contract highs from May22 through Mar24. The prompt Mar22 contract traded from a low on Monday of 19.74 USc/lb, up to a high on Thursday of 20.69 USc/lb before losing most of those gains and closing the week virtually unchanged at 19.99 USc/lb.


Brazil: Positivity over next year’s crop has increased due to good rain in cane growing districts, with further falls expected into December. Energy prices declined this past week with Brazilian hydrous ethanol prices falling roughly 7% from month highs and crude oil dropping 9%, causing the Brazilian real to drop 4% respectively. Ethanol parity remains around the 20.00 USc/lb mark.


India: The Indian harvest is reportedly off to a strong start as the Indian Sugar Millers Association published a record high of 2.09 million mt of sugar produced at mid-November. This figure is approximately 24% higher than last year’s figures and is mostly attributed to the Maharashtra and Karnataka regions. As the ICE 11 price spiked above Indian export parity (approx. at 20.50 USc/lb) it is estimated that almost half a million mt of Indian sugar was sold as additional export sales bringing the total to an estimated 3 million mt. 


Thailand: The Thai Sugar Millers Corp (TSMC) predicts a cane output of 90 million tonnes this season, up nearly 30% year-on-year. Forward projections to the 2022/23 crop are expected to return to a reasonable level of 100 million tonnes. Sugar make is expected to be up to 9.5 million tonnes this year from a low of 7.5 million tonnes last year.

COT (speculator activity): Speculators added a substantial 27,000 lots to their net lot position across the week, according to the latest Commitment of Traders report. The specs now hold a 190,000 lot net long position. 
Currency

Currency:

Overview: The Australian Dollar (AUD) continued to trend lower for another week, led by collapsing energy commodity prices and a higher US dollar index. The AUD moved from a high of 73.70 US cents on Monday, down to a low on 72.30 US cents on Friday.

AU Data: Domestically, wages are reported to be on the rise with the Q3 Wage Price Index (WPI) printing a gain of 0.6% and settling just above pre-COVID rates at 2.2% year-on-year. The Australian Bureau of Statistics (ABS) believes the gain is due to salary reviews post financial year end as employers experience less burden of COVID-19 financial impacts. 

COVID-19: In COVID-19 news, Austria has announced a nationwide lockdown for 20 days as the coronavirus spreads across Europe. Germany is also experiencing its highest case numbers on record and could be foreshadowing a fifth wave of the virus as Europe enters winter. 

Oil: Crude oil futures took a hit last week after the US White House pushed the OPEC group to release future oil supplies in an attempt to combat rising energy prices. Prices have now fallen for a fourth consecutive week with Brent closing at US$78.89 and WTI closing at $US76.10.

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