Index Sugar Prices Dropped 2010-2012

Index of sugar prices dropped to 274.4 points from 288.2 points in October, to the lowest level since August 2010. The FAO dairy-price index rose to 195 points from 194 in October, the highest level since March, the data showed. The index for meat prices dropped to 174.7 points from 176.

World grain production may drop to 2.28 billion metric tons this year from 2.35 billion tons the previous season, the FAO wrote in a separate report. The outlook was cut by 2.3 million tons from a month ago on reduced estimates for the global wheat harvest.

Grain consumption is forecast to slip to 2.31 billion tons from 2.32 billion tons, while global grain stocks are predicted to fall to 494.7 million tons at the end of the 2012-13 season from 519.5 million tons a year earlier. The outlook for ending stocks was cut by 2.7 million tons.

Farmers across the world may harvest 659.4 million tons of wheat in 2012 from 699.4 million tons last year, the FAO said, cutting its estimate by 1.8 million tons.

The world crop of coarse grains, including corn and barley, may slip to 1.14 billion tons from 1.17 billion tons a year earlier, while rice production is expected to increase in 2012-13 to 486.8 million tons from 482.7 million tons.

Sugar Commodity Industry takes Sugarcane and Sugar Beet as Raw Materials

Sugar commodity industry takes sugarcane and sugar beet as raw materials to manufacture finished sugar products which find application in food & beverage sectors. In 2011, the global sugar output amounted to 160 million tons and was mainly distributed in Brazil, India, the European Union and China. Brazil, the world's largest sugar producer and exporter, boasted 23.8% of the global sugar output in 2011.

The leading sugar manufacturers in China include Nanning Sugar Industry Co., Ltd., Guangxi Guitang (Group) Co., Ltd. and COFCO Tunhe Co., Ltd., etc. In 2011-2012, as increased purchasing costs of sugarcane and falling sugar price shrank profit margins of the enterprises, the majority of sugar producers suffered a declining profit. Taking Nanning Sugar Industry for example, the revenue of the company rose by 9.0% YoY to RMB4.22 billion, and its net income plummeted by 73.5% YoY to RMB45.4 million in 2011. Later in H1 2012, the company made a loss of RMB44.1 million.

As one of the major producers and consumers of sugar, China ranked the global No. 3 and No. 2 in sugar output and consumption respectively in 2011. Sugarcane serves as principal raw material for sugar production and contributes more than 90% to the sugar output. In 2011, the output of China's sugar grew by 5.8% YoY to 11.7 million tons. The main producing areas of sugar are Guangxi, Yunnan and Guangdong which together account for about 85% of the country's total output.

With respect to sugar consumption, the rising living standards of Chinese residents and the rapid progress of sugar-consuming industries such as food and beverage sectors have empowered the sugar consumption in China to stay at approximately 14 million tons in recent years. In 2011, the apparent consumption of sugar in China got to 14.6 million tons; due to the fact that the sugar output failed to meet the demand, China imported 2.9 million tons of sugar, up 65.3% year-on-year.

Sugar Futures Fall in Intra-Day Trade India

Sugar futures have fallen sharply in intra-day trade India as news on sugar imports from Pakistan and government measures to ensure sufficient supplies during festive season dampened market sentiments.

At National Commodity and Derivatives Exchange (NCDEX) Sugar Nov contract was down 0.45% at Rs 3310 per 100 kg while Oct contract is down by 1% at Rs 3373. NCDEX Sugar Nov is trading below 20, 50 day moving average with support at 3250, 3200 levels while resistance is seen at 3340, 3400 levels, according to Sreekumar Raghavan, Chief Commodity Strategist at Commodity Online.

The near term trend appears sideways to bearish with festival demand to provide firm support, he added. Indian mills have already signed deals to buy up to 450,000 tons of Brazilian raw sugar for delivery from October to December as a gap between domestic and overseas prices widens. India is importing sugar for the first time in more than two years.

The freight-on-board (FOB) price of $545 per ton has been attractive enough for the traders who have contracted to buy sugar from Pakistan as they stand to gain $15-$20 a ton after paying a duty of 10%, according to sources. India levies a 10% tax on sugar imports. The International Sugar Organization said it expected a global sugar surplus of 5.86 million tons in the season running from October 2012 to September 2013, up from the prior season's surplus of 5.19 million tons. The ISO said the stocks/consumption ratio could rise to around 40 percent in 2012/13, from 37.6 percent in 2011/12.

India, the world's top consumer and the second largest producer of sugar to import about 5,000 tons of white sugar from Pakistan. Indian traders have signed a deal with Pakistan regarding the import, according to trade sources. The area under sugarcane in India is estimated at 52.88 lakh ha for 2012-13 crop season, up from 50.99 lakh ha on same period a year ago. According to the first advance estimates by agriculture ministry, Sugarcane output is pegged at 335.3 mn tn, down by 6.2% compared to 357.6 mn tn last year.Industry body ISMA has estimated 6 mn tn stocks for the new season beginning October 01, 2012 compared to 5.5 mn tn year ago. India may export 2.5-3 mn tn sugar in 2012-13.

Sugar Forecast Higher than Estimates from International Sugar Organization

Sugar forecast is considerably higher than estimates from the International Sugar Organization, of output of 37.2m tonnes, besides lower figures from other commentators, such as Macquarie, which use a marketing year starting in March rather than October.

Australian farm officials lifted hopes for New York sugar prices despite flagging upbeat hopes for Brazilian output of the sweetener, putting the world on course for a third successive season of surplus.

Sugar output from Brazil, the top producer, will rise by some 2m tonnes to a record 40m tonnes in 2012-13, rebounding from a second successive season of decline, commodities bureau Abares said.

Abares said its estimate "reflects a recovery from the poor crop in 2011-12 that resulted from adverse seasonal conditions, ageing cane plantings and crop diseases".

However, while output will rise from Australia, China and Mexico too, Thailand's run of increasing production will stall, at 10.6m tonnes, and that in Europe and the former Soviet Union decline as beet yields return to average levels, after bumper harvests last year.

And although Indian output will increase by some 900,000 tonnes to 29m tonnes, a 10.4% jump in consumption will limit the impact of the uplift on international markets, leading in fact to a 1m-tonne drop to 2.5m tonnes in exports.

The bureau lifted to 20.0 cents a pound, from 17.8 cents a pound in March, its forecast for 2012-13 sugar prices as measured by the nearby New York raw sugar contract.

While a decline from the 22.5 cents a pound expected for 2011-12, the price "will still be favourable, and well above 11.4 cents a pound, the average over the 10 years to 2008-09".

Sugar forecast is also in line with the New York futures curve.

Abares forecast world sugar output at 175.8m tonnes, a figure which, with consumption pegged at a little under 174m tonnes, implied a production surplus of 4.1m tonnes.

The figure would follow surpluses of 6.3m tonnes the previous season and 600,000 tonnes in 2010-11, on Abares estimates. The International Sugar Organization has estimated the 2012-13 surplus at 4.0m tonnes.

Brazil Raw Sugar 2012 Rose, Coffee Price Gained

Raw sugar rose the most in more than a week on signs that rains will hamper crops in Brazil, the world’s top producer. Coffee gained, while cocoa slid.

Rains are forecast to last through the beginning of next week, according to Marco Antonio dos Santos, an agronomist at weather forecaster Somar Meteorologia in Sao Paulo. Rainfall has slowed Brazil’s sugar harvesting and spurred an 18 percent drop in the amount of cane processed by mills in the second half of May, Unica, an industry group, said yesterday.

“Rains forecast for next week may be helping sugar up today, as they will reduce the sugar content in the cane,” Juliano Ferreira, a broker at ICAP do Brasil Ctvm, said by e- mail today.

Raw sugar for October delivery climbed 2.6 percent to settle at 20.01 cents a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest advance since June 6.

Options contracts, which give the holder to right to buy or sell the futures at a fixed price, for July delivery sugar on ICE expire today. There are about 12,000 outstanding contracts giving holders the right to sell sugar at 20 cents a pound.

“We also have the options expiry today, and with the harvest delayed in Brazil, it may be that traders will try to take a large delivery when the July contract expires,” Ferreira said. “The ones that sold this position will try to defend the price up to 20 cents.”

Arabica-coffee futures for September delivery advanced 0.6 percent to $1.52 a pound on ICE.

Cocoa futures for September delivery declined 0.7 percent to $2,247 a metric ton in New York.

In London futures trading, refined sugar and robusta coffee climbed on NYSE Liffe. Cocoa dropped.

Sugar Futures Prices extend Uptrend on Expectation

Sugar futures prices remain bullish on expectations of lower monthly quota for March coupled improvement in spot demand. Although government has not yet released March quota, the talk has boosted spot demand.

In NCDEX sugar April contract on Tuesday closed at Rs.2957 per quintal, higher by 0.27 per cent against the previous close. According to an analyst with Angel Commodities, sugar prices may remain firm during the intraday on various positive factors which includes export notification, expectations of lower monthly quota and improvement in physical demand.

On 23rd February 2012, Indian government issued a notification to mills detailing terms for the export, wherein it asked mills exporting sugar from their own production to submit applications to authorities within 30 days from Feb. 23 while those sourcing the sugar from another factory were asked to submit applications no later that 45 days from the date of the circular.

The global sugar markets may initially correct lower following the expiry, but the traders there see the potential for the May premium over July to strengthen as a limited amount of Sugar remained available for delivery against May, particularly with the timing of Muslim holy festival which will boost demand, according to Angel Commodities.

Sugar output during Oct 01 till 15th Feb 2012 is up 15% at 16.3 mn tn on higher cane area and recovery. According to ISMA, Maharashtra, the country's largest sugar producer, is likely to produce 9 mn tn sugar in 2011-12 season, followed by UP at 6.8 mn tn and Karnataka at 3.8 mn tn.

International Sugar Organisation Increased Forecast Global Sugar Surplus 2011-2012

International Sugar Organisation has increased its forecast for the global sugar surplus in 2011/12 to 5.17 million metric tonnes in its latest quarterly market outlook, compared with its projection of 4.46 million tonnes made in November .

The ISO now estimates total world production at a record 173 million tones with beet sugar production expected to account for most of the increase - with growth of more than 6.1 million tonnes on the year. Cane is likely to demonstrate a more modest 1.9 million tonne increase, despite a significant decrease in sugar output from Brazil.

The ISO expects global consumption to reach 167.83 million tonnes, with "healthy" 2.32% growth on the year, compared to 0.34% in 2010/11 and 0.93% in 2009/10.

Upward revisions for production mean that stock rebuilding should accelerate in the second half of the season with the stocks to consumption ratio rising to about 37% which is likely to put bearish pressure to world prices.

In the midst of global surplus production and high competition, India, world’s second largest producer of sugar, struggles to find importers and till now has exported around 5 lakh ton (0.5 million tons) for 2011-12.

Till now, the exports was mainly to Africa, Sri Lanka and Australia.

According to Swiss Kingsman SA, the global sugar production is expected to be around 176 million tons and consumption is expected to be around 170.6 million tons from 2011-12.

Meanwhile, India is expected to produce around 26 million tons of Sugar and consumption is estimated to be around 22 million tons.

With the record surplus production of the country, the government has allowed 2 million tons for exports but the country is presently facing difficulties in exporting the commodity due to higher production in other major growing areas.

India had exported 2.6 million tons of sugar during 2010-2011.

Presently, Sugar futures in Inter-Continental Exchange (ICE) and in India's National Commodity and Derivative Exchange (NCDEX) are trading up.

Sugar for March delivery, in ICE traded up 0.18 cents to 25.94 cents per lb on 23rd February.While in NCDEX, the commodity traded up 0.21% to Rs 2861 per qtl on 24th Febraury at 11:15 IST.

Sugar Futures Trading 2012 longstanding level

Sugar futures launched out of its recent trading range on Thursday, blowing through a longstanding level with ease. This explosive move higher after last week’s narrow consolidation zone confirms a trend shift. This is an upside technical breakout from the Flag chart pattern identified on Autochartist’s 240-minute time interval.

The swift rise in price throughout Wednesday’s session resulted in a close slightly above the breached level of 24.70 cents per pound. This put an artificial hold on the momentum reading, which may result in a strong opening on Thursday as momentum traders pile in. The minimum upside target from here remains at the 25.08 cents per pound price, with the upper end of 25.50 also possible. A rapid approach to these key levels would encourage long term traders to consider this as as the beginning of another leg in the major sugar bull market, with an eventual return to trade above 30 cents again.

Weakness at the current breakout level in the short term may signal more sideways action at the top end of the flag is needed to draw in more buyers. Alternatively, a sell-off below 23.95 support would likely trigger stop-losses, confirming a pattern failure and a bearish trend reversal.

Sugar Prices 2012 High as instability oil prices

World sugar prices are likely to stay high in 2012 due to external factors such as government policies, oil prices and instability in the Eurozone, according to FoodNavigator. Projections form the Organisation for Economic Cooperation and Development (OECD) from 2011/12 through to 2020/21 put the average price for sugar at US$518.5 per metric tonne, 48% higher than the US$349.5 per tonne average from the earlier period.

A USDA reports ‘Post-Reform European Union Sugar-Prospects for the Future' published late last month assessed past EU sugar reforms and analysed the changes ahead for the EU as a consequence of further reforms in its new Common Agricultural Policy.

The report said: "It is likely that world sugar prices will remain higher than in the past when the original reform measures were being considered."

"The Indian production cycle and government policies are the main source contributing to an expected continuation of world sugar price variability. Government policies that intervene in sugar markets are assumed to continue," it said.
"The figure shows future price volatility, with a low of USS$454.1 per tonnes in 2012/13 and a high of US$608.7 per tonne in 2015/16," said the report.

"Low prices are expected in 2012/13 and 2013/14 that make a case for retaining the quota system during the period in which quota is being debated," it continued.

The report added that another influence affecting prices was instability in the Eurozone.

"The European Union would be in strong competition for the sub-Saharan African exports unless the euro appreciates above projected levels," it said.

"Looking ahead, the value of the euro and increased demand from emerging market economies will likely have strong effects on EU sugar markets that policymakers cannot afford to ignore."

The report added that the likely enlargement of the EU to include Croatia and Serbia could also impact the sugar market.

"They (Croatia and Serbia) have been granted loans to improve their sugar infrastructure and could become more efficient producers that could add to greater self-sufficiency in EU sugar production in an EU of 30 member states."

According to the report, a lack of risk management policies in the EU, Unlike in other regions, mean the next CAP reform will likely address the price volatility issue, though many factors will still affect sugar prices.

"Oil price changes affect world sugar prices by influencing trade-offs in producing either sugar or ethanol in Brazil," said the report.

Sugar prices will continue their good trend next year despite the natural disasters that have plagued several cane-producing countries, says the Office of the Cane and Sugar Board (OCSB).

Secretary-general Prasert Tapaneeyangkul said prices for the next three years will stand at 22 US cents a pound, up from 12-16 cents in the past.

"Next year's global sugar surplus is expected to be 4 million tonnes, but prices will remain good. This shows that cane and sugar are commodities that are very stable," he said.

Brazil's output will worsen after many years of drought and frost, while new planting is limited, said Dr Prasert.

Meanwhile, India is starting to produce at a sufficient rate and will export 2 million tonnes after remaining stagnant for three years. Thailand's flood crisis will have little effect on cane production, which is forecast at 100 million tonnes for the 2011-12 season, he said.
The OCSB also approved a decision to increase initial sugarcane prices to 1,154 baht a tonne for the 2011-12 season. Planters had asked for a 200-baht increase from the current price of 1,000 baht.
"The only risk we'll have next year will be from natural disasters. There'll still be a lot of water next year, but drought is expected within two years," Dr Prasert said.

However, Chaiwat Khamkaenkhoon, president of the Northeastern Region Sugar Cane Planters Club, said production for the current season would total only 90-95 million tonnes due to flooding in the North and Northeast a and drought in the central region.

Global Surplus Sugar 2011, Ukraine Sugar beet harvest 15 million Tons

Global surplus sugar for December 2011 will be 8.4 million tons, the most since 10.8 million tons in 2002-03. Ukraine?s sugar beet harvest is 15 million tons so far, according to the statistics office. Its sugar exports will be 217,000 tons for 2011-12 compared with 109,000 tons a year earlier, the USDA estimates.

Sugar fell heading for a fourth weekly decline, on signs new harvests will add to supplies. Raw sugar for March delivery dropped 1.6 percent to 24.99 cents a pound at 8:21 a.m. in New York on ICE Futures U.S., bringing the drop this week to 2.3 percent. Prices are down 22 percent this year.

White, or refined, sugar for March delivery fell 2.2 percent to $641.70 a metric ton on NYSE Liffe in London. Ukraine?s sugar beet harvest was almost 29 percent larger than last year as of Nov. 1, the state statistics office said today. Ukraine?s sugar exports will double in the 2011-12 season started Oct. 1, the U.S. Department of Agriculture estimates. Global sugar output will exceed demand by the most since 2002- 03, says Kingsman SA, a researcher in Lausanne, Switzerland.

International sugar market is likely to be well supplied in 2011-12 thanks to bumper beet and sugarcane crops in other producing countries? besides Brazil, Lysu Paez, an analyst at Natixis Commodity Markets Ltd. in Paris, said in a report e-mailed yesterday. ?These figures, combined with a potential slowdown in global sugar demand, may keep sugar price under pressure over the coming weeks.

Sugar Prices mid 2011 Drop as Europe Increase Supply

Sugar prices may drop at least 13 percent by early next year as an increase in supplies fromEuropeandAsiacounter a drop in production inBrazil, according to broker and researcher Kingsman SA.

Sugar futures reached a six-month high last week on concern that cane production inBrazilwill drop for the first time in six years because of adverse weather, paring global surplus. Raw sugar for October delivery fell 0.27 cent, or 0.9 percent, to settle at 29.62 cents a pound today on ICE Futures U.S. inNew York.

China, the biggest sugar consumer afterIndia, may buy as much as 2.5 million tons in 2012, up from an estimated 2.3 million tons this year, Kingsman said.

The March-delivery contract may drop below 25 cents a pound on ICE Futures U.S. in New York starting January, Managing Director Jonathan Kingsman, said in a phone interview from Lausanne, Switzerland, yesterday. The contract traded 1 percent lower at 28.69 cents a pound at5 p.m.in Mumbai.

A drop in prices of the sweetener, used in everything from cereals to candy, may help cap global food costs tracked by the United Nations that advanced to a record in February. Kingsman joins Rabobank International and Goldman Sachs Group Inc. in predicting lower sugar prices, citing increased supplies. Goldman Sachs forecasts the price may fall to 20 cents a pound in 12 months, it said in an Aug. 11 report.

?We would expect prices to ease but not fall dramatically on higher global production,? Kingsman said. ?The surplus will mainly be in white sugar next year.?

Production gains inRussia, the European Union,ThailandandIndiamay help the global sugar surplus to reach 9.5 million metric tons in the 2011-2012 season, Rabobank International said on Aug. 24. The surplus may be used to replenish global inventory, it said. It may take two years to rebuild stockpiles pared by a 15 million-ton deficit left by smaller crops in 2008-2009 and 2009-2010, Sergey Gudoshnikov, senior economist at the International Sugar Organization said on July 26.

?We expect that high prices should give an incentive to increase acreage of sugar beet and sugar cane on a worldwide basis,? Michaela Kuhl, an analyst at Commerzbank AG, said by phone fromFrankfurttoday. ?We don?t think prices will stay at the current levels. We think they will come down a little bit.?

Commerzbank expects futures to average about 25 cents in 2012, she said.

Brazil?s sugar cane production in the Center South, the world?s biggest producing region, will be 498 million tons in the 2011-2012 season, down from 525 million tons estimated in July after last year?s drought and heavy rains this year, Kingsman said Aug. 26. Sugar output will be 30.63 million tons, less than the 31.87 million forecast earlier, and down from 33.5 million tons last season, Kingsman said.

Poor Weather

?Weather has been quite poor inBraziland they haven?t been able to get on with their planting,? Kingsman said. ?They haven?t been able to plant as much new cane they would have liked. So we don?t expect Brazilian production to start picking up again until 2013.?

The sugar output inIndia, the world?s second-biggest producer, may climb 7.4 percent to 26 million tons in the year starting Oct. 1, from 24.2 million tons this year, Kingsman said. Exports may total 3 million tons to 4 million tons during the 12-month period, he said.

?Indian exports will have to fill in the gap left by theBrazilshortfall,? he said. ?This is fairly a unique opportunity forIndiaas it will be in a surplus when the world actually needs sugar,? said.

Raw Sugar Future Trade Triple as Global Sugar Production Fell

Raw sugar futures traded in New York tripled in the past year as global production fell short. Demand in India, the world?s biggest user, rose 13 percent in four years while output was little changed, according to the U.S. Department of Agriculture. In Brazil, the biggest producer, sugar output climbed 25 percent over the same period, the USDA says.

Global sugar production will probably exceed demand by at least 9 million tons for the 2011-12 season, the second surplus in a row, Rabobank estimated in a report yesterday.

EU beet growers will harvest 17.26 million metric tons in the 2011-12 crop year starting Oct. 1, the largest since 2005- 06, and up from 15.2 million a year earlier, Rabobank International estimates. Supplies will increase as farmers boost plantings by 4 percent to 3.89 million acres, according to the European Commission, the executive arm of the 27-nation EU. The European Union?s sugar-beet crop, the world?s largest, will be the biggest in six years, at a time when Nestle SA and other food companies say supplies are running short.

The EU spent four years shrinking the sugar beet industry after a World Trade Organization ruling that limited exports. Importers approved to ship to the EU were able to sell sugar for more elsewhere as global prices soared. That left food companies without enough supplies, Nestle says.

?I don?t think anybody had this in mind when the policy was changed,? said Gorjan Nikolik, an analyst at Rabobank in Utrecht, Netherlands. ?Nobody at all imagined at that time that Europe would not be a good place to send sugar.?

The EU began paying sugar factories to shut in 2006, in a bid to cut production and support prices. Tate & Lyle Plc, after 132 years in the business, sold its EU refineries last year to American Sugar Refining Inc. Danisco A/S, based in Copenhagen, sold its sugar operations in 2009 to Braunschweig, Germany-based Nordzucker AG.

?Major Issue?

?There is a major issue in the EU of not being enough sugar available to meet demand,? Vevey, Switzerland-based Nestle said in a statement on Aug. 13. ?Sugar reform has been based on the assumption that world sugar prices would remain lower than prices in the EU which has not been the case. Consequently, the EU sugar market is not functioning as foreseen.?

Nestle is the world?s biggest food company and uses sugar in products such as KitKat chocolate bars and Haagen-Dazs ice cream.

R&R Ice Cream Plc, Europe?s largest private-label producer of ice cream, expects prices for sugar-based foods in the EU to rise 20 percent by April because of higher costs of the sweetener, Chief Executive Officer James Lambert said Aug. 15. R&R buys about 50,000 tons of sugar a year, including 10,000 tons from the U.K., he said.

Shortages of sugar were caused by decreased output last year after an early freeze and reduced imports the prior year, said Roger Waite, a spokesman for the commission.

?One-Off Year?

?What we?ve seen is a one-off year, we hope anyway, where supply has been difficult to find and supply from the least- developed countries has been lower than normal,? Waite said. ?We don?t think that?s a structural problem.?

Raw sugar in New York, a global sugar benchmark, may drop to 21 cents a pound in the next 12 months because of the increased supplies, said Keith Flury, an analyst at Rabobank in London. Goldman Sachs Group Inc. forecasts the price may fall to 20 cents a pound in 12 months, it said in an Aug. 11 report.

Sugar Prices

Raw sugar for October delivery dropped 0.95 cent, or 3.2 percent, to 29.23 cents a pound by 12:244 a.m. London time on ICE Futures U.S. in New York. Prices have jumped 46 percent in the past year on signs of crop damage in Brazil.

The EU sugar beet crop was 10 percent smaller last year because of frost, according to the USDA. That pushed up sugar prices as much as 70 percent in some parts of the EU, Rabobank said. Buyers in Poland where sugar is in short supply reportedly went to Germany for sweetener to resell it at home for a profit, Rabobank said in May.

To boost supplies, the EU authorized more sugar imports at zero duty. White, or refined, sugar was selling in Europe at about 517 euros ($745) a ton in March, more than the EU?s reference price of 404.40 euros, spurring the EU to take market action to boost supplies, said Nikolik.

?The most important thing was refiners and sugar buyers were saying we can?t find sugar,? he said. ?The price premium is just one indicator. But you don?t need an indicator when people are saying we?re not able to find sugar.?

Reference Price

The reference price is the basis for negotiations with importers and the sale of intervention stocks that are used by the government to balance the market in times of shortage or surplus. The reference price replaced the support price before sugar reform and was the guaranteed price the government mandated for sales.

The WTO limited EU exports to 1.35 million tons a year. Last year, the EU limited its exports to about 600,000 tons.

?Most of the extra production for this year will go into exports, and some will go into storage and also some will be produced into ethanol and used in the industrial sugar market,? Nikolik said. ?Domestic sugar users for human consumption will not be able to benefit from this strong production.?

France, the EU?s biggest sugar producer, will have a record yield of 15.4 tons a hectare (2.47 acres), and the U.K.?s crop will be 20 percent larger, Rabobank said in yesterday?s report.

Robert Baker, 48, who farms 2,000 acres of sugar beets, wheat, rapeseed and barley in Bury St. Edmunds, England, says he?s sticking with the beet crop because it?s made a ?sensible return. We don?t want to give up that security.?

After losing 10 percent of his crop last year, this year?s weather resulted in ?pretty much ideal growing conditions,? Baker, who has been farming for 25 years, said. The sugar beet harvest ?looks about as good a crop as we?ve ever grown.?

EgoM Cleared Additional Sugar Export

azocommodity.com - An empowered group of ministers (EGoM) on Friday cleared an additional 500,000 tonnes of sugar exports, taking the total sugar to be exported in the current crop year, ending September, to almost 1.5 million tonnes.

The ministerial panel headed by Finance Minister Pranab Mukherjee has also decided to lower the export floor price of three premium non-basmati rice varieties.

?The EGoM has decided to allow export of another 500,000 tonnes of sugar this season under an open general licence to help millers clear their inventories,? a senior food ministry official said after a meeting of the EGoM.

He added that an additional 78,143 tonnes of sugar had been allowed for exports to the US and Oman. But that is on a government-to-government basis.

In April and June, the government had allowed export of one million tonnes of sugar in two tranches, as domestic production exceeded demand during the current crop season.

Sugar production in the 2010-11 crop marketing year is estimated at 24.2 million tonnes (mt), while consumption is projected to be 21-22 mt.

Sugar output last year was 18.8 mt.

Last week, Food Minister K V Thomas had met Agriculture Minister Sharad Pawar to discuss the issue of allowing more sugar exports, following persistent demand from millers. Officials said the food ministry was not very keen to allow more exports at this juncture because of the coming festive season.

?This is a welcome move as the exports would help in reducing the inventory and give an opportunity to Indian sugar mills to make some profit, as the international prices are almost Rs 4,000 per quintal more than the domestic rates,? Abinash Verma, director general, Indian Sugar Mills Association, told Business Standard .

He said the ex-mill price of sugar in domestic markets had dropped by Rs 2,000-3,000 per quintal since February, leading to huge losses for the mills which could have made cane price payment to farmers difficult in the next crop season.

The EGoM has lowered the minimum export price (MEP) of ?sona masoori?, ?rose matta? and ?ponni? from $850 per tonne to $600 a tonne.

In March, the government had allowed limited exports of these three varieties.

However, the MEP was kept high to prevent export of common varieties of non-basmati rice.

Officials said the decision on lowering the MEP of the rice varieties was taken, as the procurement during the current crop year was at a record high.

Officials said the panel of ministers could meet next week to deliberate on allowing export of another one million tonnes of non-basmati rice and decide on wheat exports.

Last month, the EGoM had okayed export of one million tonnes of non-basmati for the first time in more than three years, as rice stocks reached record levels.

It has also given an ?in-principle? nod to wheat exports, but could not come to a consensus on the quantity because of low international price. It had left the matter to the commerce ministry to decide on the quantum and timing of exports.

Sugar Future Delivery Trade Climb on ICE

ICE Futures U.S. Exchange, sugar futures for July delivery traded at USD0.2568 a pound during European morning trade, climbing 0.77%. Sugar futures rallied for a fourth day on Tuesday, hitting a nine-week high as a combination of lingering concerns over sugar crops in Brazil, worries over shipping delays from Thailand and a weaker U.S. dollar boosted prices. It earlier rose to USD0.2573 a pound, the highest price since April 13.

Sao Paulo-based sugar industry group Datagro reduced its forecast for the nation's sugar harvest to 536 million metric tons, down from an earlier estimate of 561 million tons. The nation produced nearly 557 million tons last year.

The group said that aging plants and wet weather while the crop was developing reduced yields from the nation's Center-South region, the world's largest sugar-producing area.

Brazil is the world's largest sugar producer and exporter, with the U.S. Department of Agriculture estimating the nation accounts for nearly 20% of global production and 39% of global sugar exports.

Meanwhile, Piromsak Sasunee, chief executive of Thai Sugar Trading, the nation's largest shipper said that vessels in Thai ports were waiting to load as much as 7% of this year's supply, as a sunken ship blocking one of the main waterways and a lack of labor combined to delay exports.

Thailand is the world's second biggest sugar exporter.

Weakness in the U.S. dollar also contributed to sugar's strength. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.21% to trade at 74.73.

A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.

Elsewhere, wheat for July delivery slipped 0.17% to trade at USD7.4138 a bushel, corn for July delivery dropped 1.1% to trade at USD7.7312 a bushel, while soybeans for July delivery eased up 0.06% to trade at USD13.8200 a bushel during European morning trade.

Sugar output of India, the world''s second largest producer after Brazil, could rise by about 10 per cent to 26.5 million tonnes in 2011-12 sugar year starting October on higher cane area, industry body ISMA said today.

Indian Sugar Mills Association (ISMA) has pegged the production at 24.2 million tonnes in the current sugar year as against 19 million tonnes in the 2009-10 (October-September). The annual domestic demand stands at 22-22.5 million tonnes.

ISMA demanded that the government should allow further export of 1.5 million tonnes of sugar under Open General Licence (OGL). In April, the government had allowed 5,00,000 tonnes sugar exports under OGL.

"We expect sugarcane area to go up by five per cent. The area is about five million hectare currently. Production is expected to be about 26-26.5 million tonnes in the next sugar season," ISMA President Narendra Murkumbi told reporters here.

"Next year we are expecting a surplus crop and currently we have enough stock. So, this is the right time to export sugar and reduce the sugar stocks held with the mills," said Murkumbi, who also heads Shree Renuka Sugars.

He pointed out that the sugar prices have been slowly but continuously falling due to delays in exports and restrictions on domestic demand because of stock-holding limit on traders.

"The mills are so overburdened with surplus inventories that most of them do not have adequate storage capacities and cash flows, which has led them to resort to distress sale of sugar, which is only bringing down the prices," he said.

"The seriousness of the problem may be judged by the fact that value of stock balance with sugar mills at present would be Rs 35,000 crore," he added.

ISMA noted that if the government does not take any steps to export some of the surplus sugar, the opening balance for 2011-12 season might be over 6.5 million tonnes. The opening stock for 2010-11 season stood at about five million tonnes.

With falling domestic prices and improving international sugar prices, the mills stand to gain about Rs 500 per quintal of sugar exports if the same is allowed immediately.

The current ex-factory prices are lower by over Rs 300 per quintal than the cost of production, he said, adding that such a situation will lead to cane price arrears to farmers. The cost of production is around Rs 2,900/quintal in Uttar Pradesh and Rs 2,700/quintal in Maharashtra.

ISMA also demanded that the duty-free regime on sugar import should end as "this is hurting market sentiments and sending wrong signals to the market about clarity of government policies and intentions".

Sugar Prices Close Following Adequate Stocks Against Demand

Sugar prices closed on a quiet note in the national capital today following adequate stocks against demand. Market analysts said adequate stocks positions against current seasonal demand mainly kept the prices unaltered. Following were today''s quotation in Rs per quintal.

Sugar ready M-30 2,940-3,020 and S-30 2,910-3,010.

Mill delivery M-30 2,730-2,915 and S-30 2,700-2,900.

Sugar mill gate prices (excluding duty): Kinonni 2,880, Asmoli 2,870, Mawana 2,830, Titabi 2,825, Thanabhavan 2,730, Budhana 2720 and Dorala 2,820.

Sugar Delivery May Rose more 3 percent, Coffee Fell as traders cover short Position

Sugar for May delivery rose 3.3% to $27.45 cents a pound. Raw sugar prices rebounded as traders covered their short positions. "It fell down from 30, so it deserves a little bouncing," PFGBEST Research analyst Robin Rosenberg told TheStreet. The commodity was down 2.1% the day before as India approved the export of 500,000 tons of sugar, easing supply concerns. Coffee prices slipped slightly as the markets try to regain "equilibrium" following the tumultuous trading environment over the last weeks, Rosenberg said.

Coffee for May delivery fell 1% to $2.66 a pound, but overall prices remain high. The commodity has soared 85.9% over the past 12 months. Maxwell House maker Kraft(KFT_), Folgers and Dunkin' Donuts maker J.M. Smucker(SJM_) and Starbucks(SBUX_) have all raised their packaged coffee prices. Starbucks CEO Howard Shultz blames the rising input costs on coffee speculators, though Rosenberg asks, "Mr. Shultz, don't you hedge your company's risk?"

"Speculators make up just a portion of the trading population. The sole purpose of commodity exchanges is to allow users and producers to hedge their risk exposure," he said in a report.

Agriculture Commodities Future Price Chart and London Prices for Sugar, Coffee and Cocoa Report

London Sugar futures for May delivery fell $21.10, or 2.8 percent, to $729.30 a ton on NYSE Liffe. Cocoa for March delivery declined 31 pounds, or 1.4 percent, to close at 2,208 pounds ($3,562) a ton. Robusta-coffee futures for May delivery gained $16, or 0.7 percent, to $2,299 a ton.

Sugar fell, heading for the longest slump in four months, on signs that supplies may increase in Brazil, the world?s largest producer. Raw sugar for May delivery dropped 0.44 cent, or 1.5 percent, to 28.34 cents at 12:10 p.m. on ICE Futures U.S. in New York. The price headed for the fourth straight decline, the longest slide since early October. On Feb. 2, the commodity surged to a 30-year high of 36.08 cents.

Cosan SA Industria & Comercio, which shares control of the largest sugar processor, said yesterday that cane output in Brazil?s main growing area may be as much as 575 million metric tons this year. That would mark a 3.4 percent increase from a year earlier, according to industry data. Today, sugar touched 27.95 cents a pound, the lowest since Dec. 8. ?Any time supply news like this comes out, you?ll see weakness in the market,? said Jimmy Tintle, an analyst at Transworld Futures in Tampa.

Coffee extended a rally to a 14-year high, and cocoa dropped. Arabica-coffee futures for May delivery rose 2.6 cents, or 1 percent, to $2.643 a pound in New York. Earlier, the price reached $2.6675, the highest for a most-active contract since June 1997.

Cocoa futures for May delivery fell $32, or 0.9 percent, to settle at $3,374 a ton in New York. Yesterday the price reached $3,444, the highest since Jan. 21, 2010.

Agriculture commodities future prices chart reported in mid of February 2011.






Prices
change
% change
time




581.300
-14.000
-2.35%
13:46




2,208.000
-31.000
-1.38%
12:01




3,380.000
-26.000
-0.76%
13:46




258.900
-2.800
-1.07%
13:45




696.500
-10.000
-1.42%
13:47




187.220
4.160
2.27%
13:47




166.300
-0.350
-0.21%
13:40




867.750
-36.250
-4.01%
13:47




950.500
-37.500
-3.80%
13:47




28.360
-0.420
-1.46%
13:47




1,383.500
-32.500
-2.30%
13:47




331.300
4.500
1.38%
13:39




411.750
-7.250
-1.73%
13:46




15.230
-0.500
-3.18%
12:48




368.000
-7.500
-2.00%
13:47




56.930
-1.350
-2.32%
13:47




1,141.000
5.000
0.44%
02/15

CANOLA FUTR (WCE) (CAD/MT)	COCOA FUTURE - LI (GBP/MT)	COCOA FUTURE (USD/MT)	COFFEE 'C' FUTURE (USd/lb.)	CORN FUTURE (USd/bu.)	COTTON NO.2 FUTR (USd/lb.)	FCOJ-A FUTURE (USd/lb.)	WHEAT FUTURE(CBT) (USd/bu.)	WHEAT FUTURE(KCB) (USd/bu.)	SUGAR #11 (WORLD) (USd/lb.)	SOYBEAN FUTURE (USd/bu.)	LUMBER FUTURE ($/1,000 board ft.)	OAT FUTURE (USd/bu.)	ROUGH RICE (CBOT) (USD/cwt)	SOYBEAN MEAL FUTR (USD/T.)	SOYBEAN OIL FUTR (USd/lb.)	WOOL FUTURE (SFE) (cents/kg)

Future Sugar Commodity Prices Gain as Rebounding Demand

Future sugar commodity prices gained in New York as demand rebounds on speculation that yesterday?s slump, the biggest in a month, was overdone given robust demand and tight global supplies.

Sugar tumbled 9.3 percent yesterday as automatic sales by computer programs exaggerated a slide that started after concerns eased that Cyclone Yasi would damage crops in Australia. Before today, prices more than doubled since the end of May as adverse global weather slashed crops.

?We have strong demand, production losses and low supplies,? said Fain Shaffer, the president of Infinity Trading Corp., a commodities brokerage in Medford, Oregon. ?We still have to wait and see what the damage was in Australia.?

Raw sugar for March delivery rose 0.6 cent, or 1.9 percent, to 32.64 cents a pound at 11:13 a.m. on ICE Futures U.S. in New York.

Sugarcane plantations may lose 50 percent of production potential after Yasi hit a region that accounts for a third of national output, according to a growers group. Australia is the third-largest exporter.

In London, refined-sugar futures for March delivery dropped $19.80, or 2.4 percent, to $794.40 a metric ton on NYSE Liffe.

Cocoa futures for March delivery declined $81, or 2.4 percent, to $3,282 a ton on ICE, heading for the biggest drop since Jan. 5.

In London, cocoa futures for March delivery fell 40 pounds, or 1.8 percent, to 2,151 pounds ($3,451) a ton on NYSE Liffe.

Arabica-coffee futures for March delivery fell 1.7 cents, or 0.7 percent, to $2.4965 a pound on ICE. In London, robusta- coffee futures for March delivery slid $22, or 1 percent, to $2,217 a ton on NYSE Liffe.

In Australia, Sugarcane plantations in the north of Australia?s Queensland state may lose 50 percent of production potential after Tropical Cyclone Yasi scythed through an area accounting for a third of output, according to a growers? group.

Farmers will begin assessing damage to the crop today, Brisbane-based Canegrowers said today in an e-mailed statement. Losses in the world?s third-largest exporter could be at least A$500 million ($507 million), it said.

Sugar rallied to a 30-year high in New York on Feb. 2 amid concern Cyclone Yasi would cut output in Australia, before slumping 9.3 percent yesterday. The 2011 crop is likely to be ?significantly reduced? by the storm, Queensland Sugar Ltd., the nation?s biggest exporter, said today.

?Some growers have lost 100 percent of their crop, a blow from which they may never recover,? Canegrowers said in the statement. ?The losses will translate over many years, as sugarcane is a multiple-year crop.?

Raw sugar for March delivery tumbled to 32.04 cents a pound yesterday on ICE Futures U.S. in New York, the biggest drop since Dec. 30. Prices fell as automatic sales by computer programs exaggerated a slide that started as concerns eased that Cyclone Yasi will lower production in Australia, traders said. Prices reached a 30-year high of 36.08 cents on Feb. 2 and traded at 32.55 cents at 5:06 p.m. Singapore time.

?Too Early?

?It is still too early for QSL to be able to fully assess how this event will impact on next season?s sugar volumes, but it is anticipated that the 2011 crop will be significantly reduced,? Queensland Sugar said today. ?We will be working closely with industry stakeholders over the coming months in relation to production forecasts for the 2011 season.?

The area hardest hit by the storm is one of Australia?s biggest cane-growing areas, with 30 percent of the nation?s crop grown from Ayr, south to Townsville and to Cairns in the north, Canegrowers said.

Global sugar production may exceed demand by a ?small? amount in the coming 2011-2012 season, though the ?fragile? balance will remain vulnerable to weather-related risks, C. Czarnikow Sugar Futures Ltd. said Jan. 31. The world market will remain in deficit in the current 2010-2011 season, it said.

Australia may produce 3.8 million metric tons of sugar in the 2011-2012 season, compared with 3.6 million tons a year earlier, Australia and New Zealand Banking Group Ltd. said in a report yesterday. Exports will be less than 2.5 million tons, the bank said.

Devastated Fields

Raw-sugar production in the country could drop to about 3.3 million tons. That compares with forecasts of 4.2 million to 4.3 million tons before Yasi struck and after two months of heavy rain and flooding in Queensland, Rabobank Groep NV commodity analyst Wayne Gordon said on Bloomberg Television yesterday. Commonwealth Bank of Australia yesterday forecast production of about 3.6 million tons, similar to 2010 levels.

?The full impact will not become clear until growers have had the opportunity to venture back into devastated fields, and possibly until the commencement of harvesting in late June,? Canegrowers said. ?Harvest will be made more difficult because of the debris in the field.?

Sugar closes quiet, Gold continues to slide, silver recovers

Sugar prices closed on a quiet note in the national capital today following restricted buying against sufficient stocks position.

Market analysts said adequate stocks position, amid restricted buying by bulk consumers like soft drink and ice-cream makers mainly kept sugar prices unaltered.

The following were today's quotation in Rs per quintal.

Sugar ready M-30 3,000-3,125 and S-30 2,980-3,100.

Mill delivery M-30 2,775-2,925 and S-30 2,760-2,900.

Sugar mill gate prices (excluding duty): Kinonni 2,900, Asmoli 2,880, Mawana 2,840, Titabi 2,830, Thanabhavan 2,800, Budhana 2795 and Dorala 2,845.

Divergent trend developed on the bullion market on Saturday as gold fell for a third day by Rs 30 to Rs 20,370 per 10 grams on sustained selling influenced by weak global trend, while silver recovered Rs 150 to Rs 43,000 per kg on buying by industrial units.

Traders said sustained selling by stockists in tandem with weakening global trend mainly influenced gold prices to trade in negative zone.

Some low level buying by industrial units helped a recovery in silver prices, they said.

On the domestic front, gold of 99.99 and 99.5 per cent purity lost Rs 30 each to Rs 20,370 and Rs 20,250 per 10 grams, respectively. Sovereign followed suit and traded lower by Rs 50 to Rs 16,800 per piece of eight grams.

On the other hand, silver ready recovered by Rs 150 to Rs 43,000 per kg and weekly-based delivery by Rs 255 to Rs 42,700 per kg.

Silver coins lacked necessary follow up support and declined by Rs 100 to Rs 48,400 for buying and Rs 48,500 for selling of 100 pieces.

Cocoa and Sugar Future Rose Coffee March Delivery Fell

Cocoa futuresfor March delivery rose $ 20, or 0.7 percent, to $ 2,850 per ton in New York. In London, cocoa futures for March delivery rose 4 pounds, or 0.2 percent, to ? 1,928 ($ 3,002) per tonne in London.

Sugar futures for March delivery advanced $ 16.90, or 2.3 percent, to $ 765.10 per ton on the Liffe NYSE, in London. Arabica coffee for March delivery fell 2.3 cents, or 1 percent, to $ 2.307 per pound in New York. In London, robusta-coffee futures for March delivery fell $ 6, or 0.3 percent, to $ 2,023 per ton.

Sugar rose the most in a week amid speculation that India, the world's second largest producer, may delay the export. Coffee and cocoa fell obtained.

On 2011 of 3 January, India said it would issue a permit for shipment to 500,000 metric tons. This country may delay the supply in an attempt to suppress food price inflation, citing sources of trade and industry that are not identified. Prices have jumped 96 percent since June 30, fears of supply will be limited from India and Brazil, the largest farmers.

"There is talk that India's exports of 500,000 tons may be delayed by the government, and which will continue to maintain a tight supply situation," said Ricardo Scaff, a trader at Rabobank International in New York.

Raw sugar for March delivery rose 1.29 cents, or 4.3 percent, to settle at 31.53 cents a pound at 14:00 on the ICE Futures U.S. in New York, the biggest gain since Dec. 31. These commodities are still down 1.8 percent this week.

Yesterday, Iraq issued a tender to buy 100,000 metric tons of refined sugar.

Prices fluctuated this week, plunging as much as 6.6 percent yesterday to its lowest level one week, as traders weighed signs of increased buying and fears India's exports to increase supplies in Brazil, the largest grower. commodities also fell this week as some traders took profits, Scaff said.

Brazil produced 38.7 million tons of mill sweetner in 2010, up from 38.2 million tons estimated in September, the Ministry of Agriculture yesterday.

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