1. Market review
spot market
The spot transaction price of white sugar in Guangxi this week was 6414~6499 yuan/ton, and closed at 6499 yuan/ton on Friday, up 101 yuan/ton from the last trading day before May Day.
As of Friday, the quotation range of Guangxi Sugar Group was 6550~6710 yuan/ton, an increase of 120 yuan/ton compared with before the holiday; The quotation range of Yunnan Sugar Group is 6360~6410 yuan/ton, which is 40~60 yuan/ton higher than before the holiday; The mainstream quotation range of processed sugar factories is 6760~6980 yuan/ton, which is 50~90 yuan/ton higher than before the holiday.
Driven by the upward trend of futures prices, the spot trading atmosphere has warmed, traders and terminals just need to replenish the warehouse, the sugar group has quoted many times in the day, and the sales volume is good in a single day with a transaction of more than 10,000 tons, and the speed of domestic sugar to the warehouse has accelerated.
Data source: Pansugar Technology
futures market
Zheng sugar SR2409 contract this week operating range of 6145 ~ 6348 yuan / ton, closed at 6347 yuan / ton on Friday, up 179 yuan / ton week-on-week, an increase of 2.90%, amplitude of 3.29%.
This week, Zheng Sugar showed a unilateral upward trend. The SR2409 contract rebounded at the beginning of the week, driven by the stabilization of international sugar prices, and returned to the first-line mark of 6,300 yuan/ton. Subsequently, the production and marketing data of the main producing areas were announced, and the sugar sales data in Guangxi in April were eye-catching, with a cumulative sugar sales rate of 57.73% in the country, an increase of 0.29 percentage points year-on-year. The fundamental support is strong, and the K-line of Zheng Tang's main contract day recorded 6 consecutive yangs, closing at 6347 yuan / ton on Friday. Sugar prices have rebounded to the relay position continuously, and the market sentiment is cautiously optimistic, and it is necessary to pay attention to the continuation of spot replenishment.
Source: Zheng Shang Law Firm
International Sugar Market
The main ICE raw sugar contract ran in the range of 19.15~20.00 cents/pound this week, closing at 19.26 cents/pound, down 0.06 cents/pound, or 0.31% for the week.
At the beginning of the week, the main ICE raw sugar contract stabilized and rebounded, hitting 20 cents/lb intraday amid concerns about the drought affecting sugarcane production in south-central Brazil, and the continued decline in sugar prices attracted sugar refiners to purchase at a point price. However, ICE raw sugar futures fell back to around 19.5 cents/lb on Wednesday and closed at 19.26 cents/lb on Friday, weighed down by expectations of a global sugar oversupply in the 2024/25 crushing season. From the overall technical trend analysis, the current ICE raw sugar futures price is in the consolidation stage of a downward trend, waiting for further guidance from the latest sugar production and export data in the central and southern regions of Brazil.
Data source: Straight Flush Futures
Second, the data says sugar
(1) Analysis of sugar supply and demand situation in May
This month, China's 2023/24 sugar production is coming to an end, thanks to a significant increase in sugarcane yields in southern China. The international sugar supply is expected to improve, and the estimated range of international sugar prices has been lowered to 19.5~23 cents/pound. Due to the improvement of sugar planting efficiency, the comparative advantage with competitive crops, the improvement of farmers' planting enthusiasm, and the overall normal weather conditions, the 2024/25 sugarcane sown area is forecast to be flat and slightly increased, the sugar beet sowing area will increase significantly, and the sugar production will maintain a recovery growth, which is expected to increase to 11 million tons, and the consumption will be basically flat, and the domestic sugar production and demand gap will be narrowed.
Source: Ministry of Agriculture and Rural Affairs
(2) National sugar production and sales data during the 2023/24 sugar production period
As of the end of April, all sugar cane sugar mills in other provinces (regions) except Yunnan Province for the 2023/24 sugar production period have been harvested. The country produced a total of 9,953,900 tons of sugar, an increase of 990,000 tons or 11.06% year-on-year. Among them, 8,814,900 tons of cane sugar and 1,139,000 tons of beet sugar were produced. The cumulative sales of sugar in the country were 5.7465 million tons, an increase of 598,200 tons or 11.62% year-on-year; The cumulative sugar sales rate was 57.73%, an increase of 0.29 percentage points year-on-year. The inventory of sugar industry was 4,207,400 tons, an increase of 392,700 tons year-on-year.
The cumulative average sales price of finished white sugar in the national sugar industry enterprises was 6,596 yuan/ton, up 731 yuan/ton year-on-year. In April 2024, the average selling price of finished white sugar was 6,565 yuan/ton, up 182 yuan/ton year-on-year and 23 yuan/ton month-on-month.
Source: China Sugar Association
(3) Futures and spot basis and warehouse receipts
The number of warehouse receipts on Friday was 25,749, an increase of 1,527 from the last trading day before the holiday; There were 242 valid forecasts, a decrease of 1,482 from the last trading day before the holiday. The number of warehouse receipts + effective forecasts was 25,991, a decrease of 42,669 or 62.15% from the same period last year.
This week, the basis of the production area (pan sugar spot - Zheng sugar main force) ranged from 183~226 yuan/ton.
Data source: Zheng Shang Firm, Pan Sugar Technology
(4) Allocate additional processing tax-paid costs
As of Friday, the duty-paid cost of imported sugar processing within Brazil's quota was 5,331 yuan/ton, and the duty-paid cost of imported sugar processing was 6,832 yuan/ton, up 97 yuan/ton and 126 yuan/ton respectively from last week. Compared with the mainstream quotation of 6760~6980 yuan/ton of domestic coastal processing sugar mills, the import profit of Brazil's additional imported sugar is about -72~148 yuan/ton, and the import profit window is opened.
(5) Raw sugar CFTC position
For the week ended May 7, the total open interest in ICE raw sugar futures + options was 977882 lots, down 5,250 lots from the previous week. speculative long positions were 156,220 lots, an increase of 3,945 lots from the previous week; Speculative short positions were 203905 lots, an increase of 3,223 lots from the previous week; The speculative net short position was 47,685 lots, a decrease of 722 lots from the previous week.
Source: Intercontinental Exchange
(6) WTI crude oil prices
WTI crude oil operated in the range of $76.89~$79.96 per barrel this week, with a weekly increase of 0.27% and an amplitude of 3.94%, closing at $78.2 per barrel.
Data source: Straight Flush Futures
(7) Sugar production and trade flows
Brazil: The number of ships waiting to load sugar at Brazilian ports was 139 in the week ended May 8, compared with 120 in the previous week. The amount of sugar awaiting shipment at the port was 5,192,500 mt, compared to 4,495,700 mt in the previous week. Of the total amount of sugar waiting to be exported during the week, the amount of high-grade raw sugar (VHP) was 5,014,300 tons. The amount of sugar awaiting export at the port of Santos is 3,744,500 tons, and the amount of sugar awaiting export at the port of Paranagua is 1,009,900 tons.
Russia: In the first quarter of 2024, sugar production was 744,200 tons, an increase of about 150% year-on-year.
Philippines: As of April 14, the 2023/24 crushing season has produced a total of 1.86 million tonnes of raw sugar, the highest level in nearly three years.
(8) Institutional projections
U.S. Department of Agriculture (USDA): Total U.S. sugar production for the 2024/25 crushing season is expected to be 9.232 million short tons. Among them, beet sugar production is 5.111 million short tons, cane sugar production is 4.121 million short tons, and the sugar stock/consumption ratio is estimated at 11.7%.
Thailand's sugar output in the 2024/25 crushing season is estimated at 10.2 million tonnes, up 16% from the 2023/24 crushing season.
European Commission's Department of Agriculture and Rural Development: EU sugar production in the 2023/24 crushing season is expected to be 15.6 million tons, up 7% year-on-year; sugar exports were 1.1 million tons; sugar imports were 1.9 million tonnes; Sugar ending stocks stood at 2.3 million tonnes.
Market agency StoneX: Sugar production in the 2024/25 crushing season in south-central Brazil is expected to be 42.3 million tons; Sugarcane crushed 602.2 million tonnes and ethanol produced 32.1 billion litres.
Datagro, a consulting firm, expects the global sugar supply gap in the 2023/24 crushing season to be 1.79 million tonnes; In the 2024/25 season, there is a global sugar supply surplus of 1.62 million tonnes. Among them, the sugar production in the central and southern regions of Brazil is estimated to be 41.6 million tons; Thailand produced 10.5 million tonnes of sugar; India produced 31.5 million tonnes of sugar.
Alvean, trader: Brazil's sugar output in south-central Brazil is expected to be 41.6 million tonnes in the 2024/25 season.
Trader Louis Dreyfus: Global sugar supply surplus of 2.5 million tonnes in the 2023/24 crushing season is expected; The global sugar supply surplus for the 2024/25 season is estimated at 800,000 tonnes.
Author | Panutose technology
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