WORLD SUGAR MARKET Jos Orive Executive Director International - - PowerPoint PPT Presentation
WORLD SUGAR MARKET Jos Orive Executive Director International Sugar Organization A year ago world prices hit bottom 26.00 25.00 24.00 23.00 22.00 21.00 20.00 ISO White Sugar Price Index US cents/lb 19.00 18.00 17.00 16.00 15.00
José Orive Executive Director International Sugar Organization
9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 17.00 18.00 19.00 20.00 21.00 22.00 23.00 24.00 25.00 26.00 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 May-19 Jun-19 US cents/lb
ISO White Sugar Price Index ISA Daily Price
A year ago world prices hit bottom
For two consecutive years world sugar balance has been characterized by statistical surplus
A possible end of the surplus phase in 2019/20
2 4 6 8 10 mln tonnes
World Sugar Surplus/Deficit 2009/10-2020/21
0.9800 0.9900 1.0000 1.0100 1.0200 1.0300 1.0400 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50
population Sugar consumption
World Population and Sugar Consumption Growth Rates (in %)
consumption growth population growth Linear (consumption growth) Linear ( population growth)
Recent years have shown a readable trend towards a slow but steady erosion in those rates from an average of about 2% in the mid-2000s to the current level below to 1.5%. A considerable part of losses in consumption growth rates can be attributed to a slowing down in global population growth. Sugar and Health debate starts taking its toll 2019/20 - growth rate close to the long term-average
Current Production (2018/19) Consumption Growth +1.39%
Brazil – the world’s largest sugar exporter
5,000 10,000 15,000 20,000 25,000
Sugar export availability in 2018/19 by countries of origin (1,000 tonnes, tel quel)
Brazil – the world’s largest sugar exporter
34 40 46 52
Brazil: sugar share in production mix, 2010/11-2019/20 (in %)
2018/19 (Oct/Sep) – 28.6 mln t + 4.5% 2019/20 (Oct/Sep) – 29.9 mln t
2018/19 output industry’s projections: July 2018 – 35.0 mln tonnes Oct 2018 – 32.4 mln tonnes Jan 2018 – 30.7 mln tonnes May 2018 – 33.0 mln tonnes India – the world’s largest sugar producer and consumer
India – the world’s largest sugar producer and consumer
India – the world’s largest sugar producer and consumer
Guaranteed prices for cane (2011/12 - INR1450/т USD29/t 2015/16 - INR2300/т USD/38t 2018/19 - INR2750/т USD41/t 2019/20 - ??? ... But cane prices are not correlated to sugar prices ... Millers’ arrears to farmers (June 2019) INR190 bln (USD2.7 bln)
2.4 mln tonnes + stocks (~15 mln t – ISMA) ISMA targets 7 mln tonne exports Production to decrease to 29 mln tonnes Deficient monsoons Cane arrears
India – the world’s largest sugar producer and consumer
March 2019 – The WTO dispute settlement body received three submissions from Brazil, Australia and Guatemala about sugar and sugarcane in India. The specific measures that are subject of the request for consultation include the fixing of Minimum Indicative Export Quotas (MIEQ), minimum selling prices (MSP) in the domestic market and increasing fair and remunerative cane prices (FRP), which is lifting production above domestic requirements. Can ethanol reduce India’s sugar surplus? YES, but it may take some time, particularly due to the necessity to reform the cane payment system. Ethanol production from cane priced at more than USD40/tonne is not economically viable option taking into account abundant molasses supply… India – the world’s largest sugar producer and consumer
EU-28 – the world’s third largest sugar producer
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1 000 ha 1 000 tonnes
EU - Sugar Production and Beet Areas
Sugar Production Beet Areas
The EU crop monitoring unit MARS currently forecasts sugar beet yields at 75.4 tonne/ha up 11% from 2018/19 and up 0.5% from the 5-year average. The European Commission estimates planting area in 2019/20 to reduce by 4.6% Improvements in yields allow us to suggest a modest rise in sugar output by about 3.5% despite a decrease in beet area.
EU-28 – the world’s third largest sugar producer
200 250 300 350 400 450 500 550
Jan-2017 Feb-2017 Mar-2017 Apr-2017 May-2017 Jun-2017 Jul-2017 Aug-2017 Sep-2017 Oct-2017 Nov-2017 Dec-2017 Jan-2018 Feb-2018 Mar-2018 Apr-2018 May-2018 Jun-2018 Jul-2018 Aug-2018 Sep-2018 Oct-2018 Nov-2018 Dec-2018 Jan-2019 Feb-2019 Mar-2019 Apr-2019
EU Average Domestic Ex Factory Prices (EUR/tonne)
Thailand – the world’s second largest sugar exporter
2 4 6 8 10 12 14 16 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
Thailand – Sugar Production and Consumption
production consumption
2018/19 output industry’s projections: Dec 2018 – 13.0-13.5 mln tonnes May 2018 – 14.4 mln tonnes Ending stocks Sep 2016 – 4.3 mln t Sep 2019 – 6.8 mlnt
Thailand – the world’s second largest sugar exporter
2 4 6 8 10 12 14 16 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Thailand – Sugar Production and Consumption
production consumption
For 2019/20 we assume a 1.5 mln tonnes drop as poor cane prices at a time of rising prices for cassava – a key competitor for cane cultivation – are estimated to have driven farmers to switch between crops… … but exports may be not effected as stocks are high
Production 2019/20 Consumption Growth +1.39%
However, considerable surplus stocks are still overhanging the market and still need to be absorbed before prices can return to more remunerative levels for producers.