Sugar prices hit the sweet spot

Port Douglas & Mossman Gazette - - NEWS - Shane Ni­chols

THE sugar price this week was stronger than in half a decade due to world short­ages, and an­a­lysts be­lieve prices could go higher.

In New York, the fu­tures con­tract for May 16 edged up to 16.58US¢ a lb on Tues­day night.

Tom McNeill of Greenpool, on ABC ra­dio on Tues­day, re­ferred to stronger val­u­a­tions for Thai sugar which he thinks will rip­ple through to Aus­tralian sugar val­u­a­tions as well dur­ing the year.

“Not only are the fu­tures val­u­a­tions ris­ing (un­for­tu­nately we’re also see­ing the Aussie dol­lar go­ing higher at the same time) – we’re also see­ing phys­i­cal val­ues be­ing paid at higher lev­els,” he said.

“In Thai­land last week there was a quoted ten­der for July/Septem­ber and the buy­ers paid 1.37¢ per lb over and above the fu­tures val­u­a­tions, so that’s very strong val­u­a­tions given the weak state of the mar­ket over the last while has seen weak val­u­a­tions, much, much lower than that. So we’re see­ing a nice co­in­ci­dence of strong fu­tures and strong phys­i­cal pre­mi­ums as well in the mar­ket­place.

“The high dol­lar has also seen growth in ethanol ex­ports to South Korea and in­quiry from the Philip­pines, largely as a re­sult of ter­mi­nal gate prices in Aus­tralia which have fallen quite sharply in con­junc­tion with lower oil prices over the past year and in par­tic­u­lar in the past six months, and ethanol prices in US dol­lars main­tain­ing rea­son­able val­ues.”

Rabobank re­gional man­ager Trent McIn­doe said prices were again re­cov­er­ing af­ter a small dip dur­ing Fe­bru­ary.

“We’ve seen prices more volatile early this year, how­ever with tight­en­ing fun­da­men­tals hope­fully prices will be sup­ported through­out 2016,” he said.

Thai and In­dian crops con­tinue to suf­fer as El Niño threat­ens to de­rail their re­spec­tive crops. With the be­gin­ning of the Brazil­ian crush in the not too dis­tant fu­ture, fun­da­men­tal­ists will be­gin to mon­i­tor weather pat­terns as th­ese could be­come the key fac­tors in the near fu­ture.

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