The True Report on Sugar 11 ( May 6 to 12 )

The global financial community is widely deployed to a rise in prices of Sugar 11 in the medium term . The question that many are making me is: When Sugar price increase? This question I wanted to turn to major players in the sugar world . Obviously this was not possible, but a sufficiently representative sample supported by explanatory data is collected and unmistakable present in this special weekly report .

Brazil

According Canaplan , consulting firms , the prospect of a lower sugar production in Brazil , the largest global manufacturer and a reduction in the supply of other manufacturers will be unable to meet the growing demand for sugar , which will have a deficit of 2 to 3 million tonnes harvested in 2014/15 (October / September) , raising the price of sugar in the second half of this year. "Brazil should produce and export less then a bit ' less . This will become more evident when the effect of drought in south-central will bring higher prices in the fourth quarter ," said Caio Carvalho, director of Canaplan during the workshop on sugar cane held in São Paulo last week. According to Carvalho , the average price will tend to increase throughout the semester , but has the potential to break 20-21 cents per pound on the New York Stock Exchange in the fourth quarter. The senior consultant for risk management INTL FCStone , Bruno Lima , also believes that the international price of sugar is expected to resume the up trend since July, when the impact of drought on sugar plantations become more apparent. " Since July , the prices of sugar should start to recover , since the impact of the drought is already beginning to be felt. And it is also the time that the rains of El Niño should begin ," he said Lima at the conference. On the demand side , explained that importers who once relied on higher stocks , such as China and Indonesia, could return to the market , having long since consumed most of their stocks .
Although sugarcane known as a peasant culture that is resistant to harsh conditions, in reality it is not. It ' obvious that its productivity depends on the favorable growth conditions , such as the management and the availability of water. So the lack of rainfall recorded between November 2013 and February 2014 has influenced the initial estimates of productivity of sugarcane in south-central 9.9% . This scenario was outlined by a survey conducted by GIFC ( Grupo de irrigacao and Fertirrigação de Cana -de- açúcar do Brasil ) in the states of São Paulo, Goiás and Minas Gerais. The survey allows us to estimate the lower productivity of sugarcane from 5% in Minas Gerais , 8% in Goiás , to end at ' 11 % in São Paulo . The survey showed a decrease in rainfall during the reporting period , compared with historical rates in the order of 50% in São Paulo, and 39% in Goiás .
A further confirmation of the decline in production of sugar cane , even the Associação das Indústrias Sucroenergéticas de Minas Gerais ( Siamig ) estimated a harvest of sugar cane for the 2014/15 to 59.5 million tonnes, 3 % below production year 2013/14 , which was 61.2 million tons. According to its president, Mario Campos , the reduction will occur due to the severe financial crisis and drastic drought that hit the area earlier this year.
Another good news for the prices of Sugar 11 is that the Brazilian government may take early measures to encourage the production of ethanol, as reported by the Minister of Agriculture, Neri Geller . According to him , the government is investigating what can be done to stimulate the sector . He declined to reveal details , but indicated that the dialogue with the Ministry of Finance, which met a few days ago in a meeting with the Minister Guido Mantega , is wider than the simple tax cuts to improve the competitiveness of ethanol compared to gasoline service stations . '

China

The Department of Agriculture in Beijing has cut its estimate of the production of sugar cane in China this season than 465,000 tons to 13.54 million tons due to the damage to crops caused by frost - setting the production in 2014-15 12.86 million tons.
The production of sugar cane in China is expected to decline in the next big season , potentially 1 million tons , as we have seen the country's first cases of arrears in payment of sugar cane . This , coupled with low sugar prices , he directed the farmers to other crops . This trend does not give the impression of decline.
� Despite having witnessed this phenomenon in Brazil and especially in India , had never been seen before in China, given the willingness of the country until a short time ago to support the values ​​of the sugar.
Mr. Shaw is expected that China's output of sugar cane (which represents over 90 % of the total sugar production in the country, dwarfing the sugar beet and its derivatives) will fall even more next season , potentially 12.3 million tons.
The growers of sugar cane in the main production areas are planting more profitable crops . In Hainan, it is expected that the area devoted to the cultivation of sugar cane fall by 11%. In Guangxi , the largest province that produces sugar cane with more than 63% of national production is expected to decline by 6% of the areas for the cultivation of sugar cane because of the passage of farmers in fast-growing tree species for industrial use .... to be continue