High Sugar Stocks Deflate World Market Prices

Jun 11 2014

Bulk Raw Sugar

17,000 tonnes bulk raw sugar in Guadeloupe. 

Market Position
International prices have continued to fall for two reasons. Firstly there is a dwindling global demand as a consequence of stock being built up by major importing countries. Secondly, as the Northern Hemisphere cane harvests near completion and the market wait to see the results of the early Centre/South harvest in Brazil.

The dry weather from December to February has resulted in around 540-590 mln tonnes cane damaged. The estimated global surplus for 2013/14 is just under 5.5 mln tonnes of sugar, this is the third successive year of building stocks with production and consumption near equilibrium. The increase in production in India was offset by decreases for Cuba, Mexico and Thailand. This has resulted in an estimated surplus of 2.4 mln tonnes of sugar for the 2014/15 crop.

Beet harvesting continued until January due to excessive rainfall mid-October in France. Beet plantings for the 2014/15 harvest progressed at a faster level this year due to mild weather since February. On average there is a 2-3% increase in planted areas, particularly in France, Germany and Poland. Production from the 2014/15 crop look set to be higher than the 2013/14 crop which suffered from delayed plantings and wet weather during the beet processing.

Early estimates for the 2014/15 beet crop are 17.6 mln tonnes. The 2013/14 season has been dominated by high stock levels, lower storage capacity resulting in lower prices. In Russia an increase in acreage due to lower grain prices and early planting should increase sugar production to around 4.6 mln tonnes. Harvesting will commence in August. The Ukraine has seen planted acreage up by 30% which could result in 1.8 mln tonnes of sugar being produced. The political disruption has to date not affected the sugar market.

Cane crushed for the 2014/15 crop was 580 mln tonnes, producing 32.5 mln tonnes of sugar, which was 1.8 mln tonnes less than in 2013/14. The diversion of cane to sugar was down to 43.6% due to ethanol paying better returns to the cash strapped mills, although the fuel mix remains at 25%. Crushing began in April benefiting from dry and cool weather, so we expect to see improved yields over last year.

The extra rainfall, growing time and an increase in planted area earlier in the growing season, followed by dry weather during harvesting has resulted in a record crop, producing 11 mln tonnes of sugar. Recent rainfall during the growing season should help improve prospects for the 2014/15 crop, although a significant amount of rain will need to fall during the rainy season to offset the arid harvest period of the previous crop.

A small reduction in planted cane for Uttar Pradesh should not affect the 2014/15 crop as recent rains in central India is excellent for the yield potential. It is expected that production for the 2014/15 crop will be above the 2013/14 output of 24 mln tonnes. With a high level of stocks the mills are expected to export around 1.0 mln tonnes of raw sugar onto the world market.

The sugar mills are reluctant to export raw sugar now that domestic prices have risen by 4%. Total exported sugar for the 2013/14 crop was 750,000 tonnes.

The 2014/15 cane crop is likely to be below the 4.1 mln tonnes produced in 2013/14 due to Cyclone Ita that has damaged up to 70% of the Queensland crop. The possible loss of cane could be as much as 1-3 mln tonne or 100-250,000 tonne of milled sugar.

Freezing temperatures in the Red River Valley delayed beet planting with estimates at a 4% reduction for the 2014/15 beet crop. In April US producers launched an anti-dumping petition against Mexico which could result in duties of up 45% on Mexican imported sugar. In Mexico there is two months remaining before the cane harvesting ends with estimates at 6.0 mln tonnes, down 700,000 tonnes on 2013/14 crop.

Production of the 2013/14 crop finished at 13.3 mln tonnes, up 33k tonnes on the previous season. Cane sugar production accounted for 12.3 mln tonnes and beet sugar 746k tonnes. China continues with building a sugar stock, which is almost at 50% of consumption.

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British GT Silverstone 500 proves a thriller

Jun 06 2014

Ecurie Ecosse GT3 Silverstone

Ragus sponsored Ecurie Ecosse GT3 takes 3rd at Silverstone.

Ecurie Ecosse retained their British GT Championship points lead thanks to Marco Attard and Alexander Sims’ third podium in as many rounds after an incident-packed race at Silverstone on Sunday (June 1).

Following a win and second place in their last two domestic outgoings, the legendary Scottish squad’s chances of notching up another victory were dashed by communication issues during a Safety Car period, not to mention multiple collisions caused by over-zealous rivals.

After another brilliant ‘Pro’ and ‘Am’ showing qualifying, the Barwell Motorsport-run #79 BMW Z4 GT3 clinched its third front-row grid slot of 2014 with a combined time only 0.1sec slower than pole-sitters Beechdean AMR.

But their good work was almost undone at the start of Sunday’s race when the PGF-Kinfaun Aston Martin tipped Attard into a half-spin approaching turn one. Only his quick reactions saved the car from fully pirouetting, but a position was lost all the same.

With the Safety Car called upon after just 30 minutes, the decision was made to pit the Scot from third. but the team’s rotten luck under caution periods this season would continue when a radio glitch ensured their call went unanswered.

Sims re-emerged from the overdue stop and immediately set about doing what he does best by gaining five positions in just six laps, as well as setting the fastest time. It was imperative that the BMW factory driver pushed hard if he was to negate the 15-seconds success penalty incurred for finishing runner-up at Rockingham, and proceeded to keep the hammer down for over an hour.

Attard then continued the good work after the penultimate stop by remaining the close proximity to fellow podium contenders Beechdean-AMR and M-Sport throughout his 50-minute stint, before Sims took over for one final time.

Indeed, he was able to quickly catch and pass Jonny Adam’s Aston Martin, which had taken advantage of the 15-seconds handicap. But it was Steven Kane’s Bentley that now posed the biggest threat from behind and, thanks to fresh rubber, was right on the blue and black Bavarian machine’s tail with only three laps remaining.

With third place up for grabs, an over-ambitious move by Kane on the penultimate lap resulted in Sims being spun around at Stowe, denying Ecurie Ecosse a hard-fought podium. That was until a post-race investigation ruled that the move shouldn’t go unpunished, thus elevating Sims and Attard back on to the rostrum and lead of both teams’ and drivers’ championship.

Tracy Trussler, Frank O'Kelly & Ben Eastick


Enjoying a great day at Silverstone were two key members of the Ragus operations team. Production & Logistics Manager Tracy Trussler and Commercial Support Manager Frank O’Kelly. Pictured here with Ragus Director Ben Eastick viewing the competing cars in the pit lane and with the Ragus sponsored BMW prior to the start.

Tracy Trussler, Frank O'Kelly & Ben Eastick Pit Lane




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