The sugar quotations show a mixed picture. In London the price is slightly under pressure, while in New York the price is on the rise. Analysts are looking at two key developments that are both pushing the market in different directions.
On the stock exchange in London, the sugar quotation is somewhat in the negative after the price rose a bit last week. In New York, after falling mid-September at $17,69 per Lbs, the price has climbed to $29 per Lbs today (Thurs, September 18,30) at the time of writing.
Analysts are paying extra attention to two factors. The EU is the third largest sugar producer in the world and the sugar beet harvest has started there. Earlier this month, the JRC Institute of the European Commission announced in the Mars bulletin that the beet harvest is relatively small. According to the JRC's forecast, the European harvest is 2% below the five-year average. For the Netherlands, Belgium and France, the harvest will be approximately equal to the five-year average. The German harvest is 4% lower in the forecast. In Spain, it is expected that 9% fewer beets will be harvested and in Italy as much as 24%. Only in the Czech Republic is the harvest above average with a 7% higher harvest compared to the five-year average.
More imports
Sugar trading house Czarnikow Group estimates sugar production in the EU plus the United Kingdom at 16,4 million tonnes. That is about 1 million tons less than last season. As a result, the EU is expected to buy more sugar on the world market. In the Netherlands, the root yields of the beets on the clay are not that bad. Yields of well over 100 tons are regularly achieved. The sugar content has decreased slightly, Cosun reports. Last week the sugar content was at 16,5% and this week at 16,2%.
Analysts are also closely monitoring developments in the oil market. Brent oil's cautious recovery in the second half of the week is helping the mood in the sugar market. This makes ethanol a bit more competitive with respect to oil. In Brazil in particular, therefore, more sugar cane has probably been processed into ethanol instead of refined sugar. This reduces the supply of sugar on the world market and thus has a price-increasing effect on sugar quotations.