Little change in sugar costs in 2021-2022 | 03/03/2021

KANSAS CITY – Regardless of forecasts from the USA Division of Agriculture for document sugar manufacturing in the USA this 12 months and subsequent, audio system on the Digital Worldwide Sweeteners Symposium 2021 on March 2 predict little value change for subsequent 12 months (2021-22 from October 1).

“Sellers are simply holding costs from FY2021 via FY2022,” mentioned Frank Jenkins, president of JSG Commodities.

Present money presents are almost 36.50 ¢ a pound fob Midwest for beet sugar, and 42 ¢ a pound from the North East and West Coast and 39 ¢ a pound from the Gulf for refined cane sugar. .

Mr Jenkins sees 2022 uncooked sugar costs (New York Contract # 16) decline by about 2 ¢ a pound from the present spot stage of almost 30 ¢ a pound.

“There isn’t a obvious (short-term) aid on the worth of uncooked sugar aside from the USDA granting further entry to Mexico,” he mentioned, including {that a} reallocation the deficit in tariff quotas could be a primary step.

Craig Ruffolo, vp – commodities specialist at McKeany-Flavell Co., predicts beet sugar costs for 2021-22 to be roughly secure with 2020-2021, in a variety near 33 ¢ to 35 ¢ a. e-book from the Midwest. He expects costs for refined cane sugar to be considerably weak, dropping from round 38 ¢ to 41 ¢ a pound this 12 months to 37 ¢ to 39.50 ¢ a pound subsequent 12 months.

Each audio system famous that the oversupply of uncooked cane sugar within the Gulf, because of the document 2020-2021 manufacturing in Louisiana, tended to tighten the home sugar market in comparison with the February forecast of l ‘USDA ending stocks-to-use ratio of 16.1%. .

“Inventories are stranded in Louisiana,” Mr. Ruffolo mentioned, noting that this was the important thing issue supporting home uncooked sugar futures close by.

Mr Jenkins added that “a lot of the rise in uncooked sugar manufacturing doesn’t go to the east and west coasts” the place refining capability is on the market.

Each gamers had been additionally considerably bearish on sugar demand (deliveries) no less than within the first half of this calendar 12 months.

Mr Jenkins estimates demand is about 75,000 tonnes lower than the USDA’s February forecast of 12,200,000 tonnes, “inflated by non-filers,” which is imported sugar counted as deliveries to the USA. time of customs clearance, however not essentially but delivered to finish customers. Because of this, he was forecasting an ending stocks-to-use ratio near 14.8%, larger than the 14.1% ratio he expects mirrored within the March provide and demand report of the ‘USDA.

Mr Ruffolo believes sugar demand will likely be sluggish to recuperate from the pandemic.

“Issues do not look very constructive within the first a part of this 12 months,” he mentioned.

He expects (industrial) demand for bulk sugar to slowly enhance “however not as a lot as anticipated” over the following three to 6 months. Nevertheless, he added that demand will finally return to pre-COVID-19 ranges.

Mr Ruffolo predicted that corn sweetener costs for 2022 would maintain roughly flat at 2021 ranges, noting that the web value of corn to refiners for that 12 months was up about 63% from 2020. , as a lot larger corn costs greater than offset small will increase within the credit score worth of co-products.

Corn refining capability was underutilized for corn sweeteners and ethanol, Ruffolo mentioned, including that demand for top fructose corn syrup “would proceed to say no.”

James Liddiard, senior vp of Agrilion Commodity Advisors, predicted continued volatility in world sugar markets in addition to commodity costs generally. He famous that world uncooked sugar futures in New York (Contract No.11) fell from a three-year excessive to a 13-year low within the first half of final 12 months and peaked. 4 years final week, as a part of a “commodities”, and partially the results of a “lengthy and powerful” place of funds.

Mainly, a big world sugar deficit in 2019-2020 has was a big surplus which has now virtually been eradicated (lower than 500,000 tonnes). Provide has tightened as a result of poor harvests in Thailand and Europe, whereas India struggles to export sugar as a result of logistical challenges from COVID-19. Brazil made up a lot of the export deficit as low power costs prompted factories in that nation to modify from ethanol to document sugar manufacturing. This 12 months, nonetheless, Brazil has needed to take care of dry climate as exporters must compete with soybeans for ships.

There’s plenty of uncertainty over world sugar consumption, Mr Liddiard mentioned, with COVID-19 inflicting logistical challenges, statistical revisions, modifications in use and factors of use, chain disruptions provide and financial impression.

Going ahead, the previous rule of two% annual progress in sugar consumption “will likely be nearer to 1%,” he mentioned.

“COVID will proceed to solid a darkish shadow, affecting direct consumption and political choices,” Liddiard mentioned.

Whereas 2020 has proven how rapidly the outlook can change and markets can react, “the important thing theme of the commodities bullish tremendous cycle can’t be ignored” and volatility would proceed.

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