THE WORLD SUGAR MARKET

APRIL 2012

The fundamental influence on prices has been the continued dry weather in Brazil which has caused analysts to downgrade their outlook for CS cane production estimates for 2012/13. A figure at the lower end of the 500-530 million tonne range is now looking more likely. Meanwhile Thailand and India have continued to demonstrate impressive results with the latter industry, in the context of a crop estimated at around 25 million tonnes, being permitted by the Government to make an additional 1 million tonnes of OGL exports on top of the 2 million tonnes that it had already approved.

Estimates of the forthcoming global surplus (October/September) vary, with one analyst now predicting some 8.5 million tonnes.

The EU Commission has recently announced that it intends to increase supplies of sugar on the domestic market to include an import tendering scheme and re-classification of 'over quota' sugar which may be sold.

In the USA, imports from traditional suppliers have also been lower than anticipated and the US Government is expected to announce an increased TRQ for certain origins.

White sugar prices are similar to a month ago and the white premium remains around US$ 100/t. Whites prices (basis May) were US$ 630/t in early April.

There is an expectation that world prices will start to fall, probably in Q3 of 2012 as the Centre South harvest in Brazil gets underway.