CBL Information Session QSL Update 20 M ay 2015 Overview Sugar - - PowerPoint PPT Presentation

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CBL Information Session QSL Update 20 M ay 2015 Overview Sugar - - PowerPoint PPT Presentation

Jul 04, 2023 293 likes •462 views

CBL Information Session QSL Update 20 M ay 2015 Overview Sugar marketing impasse update Key market themes QSL s management of the market Current indicative QSL pool prices 2 Sugar M arketing Impasse Update

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SLIDE 1

CBL Information Session QSL Update

20 M ay 2015

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SLIDE 2

Overview

2

  • Sugar marketing impasse

update

  • Key market themes
  • QSL

’s management of the market

  • Current indicative QSL pool

prices

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SLIDE 3

Sugar M arketing Impasse – Update

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  • Federal Senate Inquiry & Code of Conduct Taskforce reports

due next month

  • QSL seeks an enduring commercial resolution where growers

are given a choice of marketer

  • We are planning for 2 tonnage outcomes in 2017/ 18

1. Contractually guaranteed model: A similar range of services at an overhead cost <$5/ tonne. 2. Base case model: Assumes QSL can compete for growers’ economic interest tonnage, offering an improved range of services.

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SLIDE 4

What ’s the M arket doing?

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11.50 12.00 12.50 13.00 13.50 14.00 14.50 15.00 15.50 16.00 1/ 12/ 2014 1/ 01/ 2015 1/ 02/ 2015 1/ 03/ 2015 1/ 04/ 2015 1/ 05/ 2015

N11 Prompt Price

Price US cent/ lb.

12.78c/ lb

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SLIDE 5

What ’s the M arket doing?

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Current forward curve (AUD/ mt IPS)

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SLIDE 6

Key M arket Themes

  • M arket has been choppy after the M ay 15 expiry
  • Producers have been hitting the market very hard in the last

week and specs have bought back their short, now neutral

  • BRL/ USD very volatile: 2.20 to over 3.00 in 12 months
  • Brazil crop looking good. El Nino could affect harvest
  • Indian &Thai crops good. No reductions in production ahead
  • AUD/ USD volatile, trading up to 0.8200 after RBA rate cut
  • ICE11 = 12.78 c/ lb AUD = 0.7970
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SLIDE 7

Looking forward

  • Small deficit previously predicted is unlikely
  • Physical market in the doldrums - most homes are fully covered

& stocks very high.

  • Commodities, in general, are relatively cheap
  • Brazilian economic stability & volatility of the BRL will be critical
  • Chinese production looking smaller & local market is very high
  • Brazilian & Thai producers pricing, restricting rallies >13.50 c/ lb

in July.

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SLIDE 8

The market is encouraging storage

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A$30/ t available at the moment – was up to A$60/ t in 2014/ 15

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SLIDE 9

Why timing is everything

  • Futures positions reflect expected supply and demand
  • Later positions usually higher than the prompt, due to cost of

carry

  • Current Thai and Brazil surplus sugar to be shipped by Oct15

means later market positions are paying more

  • QSL has to make some sales against the Jul and Oct positions

due to storage constraints

  • Still plan to store as much sugar as possible to leverage higher

prices in M ar, M ay and Jul positions

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SLIDE 10

Sales timing key for optimal pool performance

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  • The difference between futures positions is called ‘the spread’
  • Traders buy and sell spread levels and source alternative origin

sugar to take advantage of these pricing differences

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SLIDE 11

QSL ’s management of the market

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  • 2014 pricing is 99% complete – $60 million ahead of benchmark
  • Good sales in place for 2015, with over 60% already sold but
  • nly 25% priced
  • Pricing ahead of benchmark and very active during recent

rallies, with an underweight position of our AUD coverage

  • Have taken action to protect the 2015 pools, with some floors

already in place and are considering ‘put’ options for M arch and M ay

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SLIDE 12

Current performance – 2014 Pools

$399 $368 $435 $368 $434 $368 $435 $368 $411 $368 $423 $368 $407 $368

$320 $340 $360 $380 $400 $420 $440 $460

Actual Passive Bench Actual Passive Bench Actual Passive Bench Actual Passive Bench Actual Passive Bench Actual Passive Bench Actual Passive Bench Harvest Actively M anaged Discretionary Growth Pool 2014 Forward Season Guaranteed Floor Weighted Average

Net AUD/ mt IPS

2014 Season Net Pool Performance vs Benchmark ($A/ mt IPS

)

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SLIDE 13

Indicative 2015 QSL Pool Results

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$384 $375 $386 $375 $434 $375 $424 $375 $401 $375 $385 $375

$340 $350 $360 $370 $380 $390 $400 $410 $420 $430 $440

Actual Passive Bench Actual Passive Bench Actual Passive Bench Actual Passive Bench Actual Passive Bench Actual Passive Bench Harvest AM P 2015 3 Year Forward Season 2015 2 Year Forward Season Guaranteed Floor Weighted Average

Net AUD/ mt IPS

2015 Season Net Pool Performance vs Benchmark ($A/ mt IPS)

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SLIDE 14

QSL ’s Grower Reps

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Joseph Russo Thomas Harney Anthony Ross Kevin Joseph Borg Francis Perna Barry Stubbs Gerard Puglisi T

  • ny Castro

Jeffery Atkinson Nirmal Chohan Jeffery Day M ichael Pisano M ark Blair Philip Deguara Vincent Ross Kelvin Griffin Richard Skopp Roger Piva Russell J

  • rdan Ramon Poli

David Lando

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SLIDE 15

Questions?