...continuous
India
In the current season , sugar production has fallen by 13 percent to 6.42 million tonnes (Mt ) in Uttar Pradesh. During 2012-13 , the production of sugar in the state stood at 7.4 million tonnes . So there was a considerable drop as much as 1 million tons of sugar produced .
With regard to the serious problem of which I mentioned above , in this report , in the section devoted to China, namely the impossibility of sugar mills to pay wages to farmers , Agriculture Minister Krishna Byregowda said that the stance of the sugar is not justified : " We want the sugar mills to pay all arrears with interest to farmers. Unlike previous years, the factories were exempted from the payment of Rs. 13 for each pound of sugar. wait for a couple of days before to adopt more stringent measures , "he threatened .
As for shipments of sugar from India , the second largest world producer of sugar, are seen in the continuous slowing down after prices on the domestic market rose to a maximum of 15 months.
How will India's sugar exports in the six months ending in September? " Exports may be about 300,000 tons , compared to 1.5 million tonnes in the previous six months," he said Narendra Murkumbi , Shree Renuka Sugars CEO ( SHRS ) Ltd., on May 5.
The lower -than-expected shipments from India may support prices in New York along with the predictions of the first global deficit in five years due to the drought in Brazil and Australia.
"I think because of the uncertainty about the subsidy there can be a lot of sugar exports in the second half of the year ," said Murkumbi . " Domestic prices have risen . Then the parity is no longer there . Domestic demand has been very encouraging this time . And ' certainly more solid than last year."
" I think there are a lot of weather hazards related to sugar in the next six to eight months ," said Murkumbi . "Sugar may be volatile because of this. "
Sugar production in India will be a total of 23.8 million tons in the 12 months that will end on September 30, the lowest level in four years , compared with 25.1 million tons a year earlier after the excess rains have reduced yields , according to an estimate of the association of sugar . Stocks fall to around 6 million tonnes from Oct. 1, from 9.3 million tonnes the previous year , said Murkumbi , reiterating the concept of which I have mentioned in previous reports , that the prospects for the production next year will depend on the monsoon rains ( provided in sharp decline due to El Nino ) .
To get a better idea on exports , remember the words of Abinash Verma, director general ISMA (Indian Sugar Mills Association ) who recently said: " With prices finally looking attractive here in India, I believe any major export deal will only happen if global prices jump to 18.5 cents per pound . " In essence confirms that the Indians have no interest in sugar export at prices below $ 18.50 , insofar as they accomplish more on the domestic market .
U.S.A.
The Mexican sugar industry - 20% of which is owned by the Mexican government - has increased exports to the United States from 9% of the U.S. market in fiscal year 2012 to almost 18% in 2013.
The growth of Mexico's exports to the United States is fueled by substantial subsidies in higher dumping margins of 45% or more , according to the ASA ( American Sugar Alliance). It is argued that Mexico is directly responsible for the collapse of sugar prices in the United States , which have fallen by 50 % since the end of 2011 and are back to the lows of 1980. , The positive closing of this dispute may also have positive effects on Sugar 11 , at least from a psychological viewpoint .

El Nino

The Indian Meteorological Department said this month that the summer rains are likely to be below normal levels due to El Niño . In 2009, the year of the last El Niño event , the monsoon rains in India were 23% below normal levels , and have sharply reduced the production of sugar , helping to drive prices to record levels of Sugar 11 .

"The expectation is that El Niño is “more likely to affect Australia, Southeast Asia , and Latin American countries such as Brazil and Peru ," said Zhou Jun , an analyst at Zheshang Tianma Futures Co.

The India Meteorological Department ( IMD) has predicted a 60 percent chance of El Nino this year with monsoon rains below the average . I repeat for the umpteenth time that El Nino can cause extreme drought conditions . As is well known : the repetition is the mother of memory.
El Nino is a weather condition that lasts for about a year on average. This period coincides with the warming of sea surface temperatures that affect wind patterns , floods and drought in different parts of the world.
According Skymet , a private meteorologist , El Nino and the Indian monsoon are inversely proportional . The major drought in India since 1871 have been El Nino drought , including the recent ones in 2002 and 2009 , he said.
A moderate El Nino in 2002 caused one of the worst droughts.
The historical data of 126 years ( 1880-2005 ) compiled by Skymet show that about 90 percent of all the evolution of El Nino led to below normal rainfall and 65 per cent of the evolution of El Nino led to drought. As already stated in previous reports, one thing is clear that El Nino affects the monsoon rains in India. During this time, the rain is generally lower than normal , this obviously has its impact on agricultural production , particularly sugar cane .
The temperature of the surface waters of the Pacific Ocean began to rise in the values ​​: in early May is already 0.5 ° C above average in all regions. Moreover, according to NOAA , the U.S. agency in April , there were wind anomalies along the Pacific , which indicates a continuing trend toward El Niño . According to meteorologist of Somar , Celso Oliveira , the expectation is that these temperatures remain above normal at least until September , which is the consolidation of the phenomenon in the coming months . " The impression of what is happening is that we have a classic and intense El Niño , but in the short term ," said meteorologist Celso Oliveira . The figures that have been presented so far indicate a 60% probability that El Nino could develop in June, the figure rises to 65% in the month from July to September , and the possibility of the emergence of the phenomenon is more than 70% . The simulations show that in the month of June, in Rio Grande do Sul will feel more of the first effects of El Niño : rain intensified in the first half , due to the formation of cold fronts , which will be stationed in the state. This will cause difficulty in harvesting sugar cane.

Some hedge funds continue to hold their net long positions with the tacit agreement to keep them up to that El Nino has not reached the apex of its devastating effects. In other words, The Power will continue to support prices until then. This is the best choice , which demonstrates acute foresight.
If Brazil are expecting higher prices of Sugar July 11 (without taking into account the latest forecasts on a strong El Nino since June) , an overview of the major producing and consuming countries , it makes me conclude that prices are coming a rise as early as June , if not this month. And ' likely that someone wants to play early.

The True Study Centre

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