Sugar Quarterly Q1 2021

Rabobank’s latest Sugar Quarterly projects a deficit of 2.8m mtrv for the 2020/21 (Oct/Sep) international crop year. This supportive fundamental outlook is compounded by logistical bottlenecks (particularly in Asia) and fund inflows. Looking ahead to 2021/22, a modest 1.5mmt surplus is expected, as production recovers in Thailand, the EU, and Australia, alongside continued output increases in India, China, and Pakistan.

Report summary

World raw sugar prices have been moving sideways recently following a strong run-up early in the year. After ICE #11 (March 21) reached close to USc 19/lb in mid-February, May 21 futures are now at around USc 16/lb, with concerns about the current crop in Thailand together with logistical bottlenecks in Asia and Brazil providing support for prices.

Looking around the regions, the outlook for the new crop in Center/South Brazil remains a concern, as February’s rainfall was significantly below average levels in many cane regions. Meanwhile, as Thailand’s current 2020/21 harvest draws to a close, strong international prices and much-improved growing conditions suggest a bounce-back for Thai cane production in 2021/22. And, in the EU, spring planting of the 2021/22 beet crop has already commenced, with expectations that planting area will be relatively flat to slightly higher, though countries like the Netherlands and France have already indicated lower area than last year.

With a 2.8m mtrv deficit projected for the current international crop year and only a modest surplus forecast for 2021/22, Rabobank sees ongoing support for sugar prices, with the ICE #11 expected to average around USc 15.0 to USc 15.5/lb over the course of 2021. The analysts note that all commodity markets, including sugar, have seen significant fund inflows over recent months. The historical behavior of these participants suggests a high chance of market volatility persisting through 2021 – as the 7% plunge in oil prices on March 18 reminded us.

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  • Andy Duff

    Head of RaboResearch Food & Agribusiness - South America; Global Strategist - Sugar
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  • Maria Afonso

    Senior Analyst – Sugar, Grains & Oilseeds
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  • Pablo Sherwell

    Lead of F&A Data Analytics - North America
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  • Charles Clack

    Commodity Analyst
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  • Lief Chiang

    Analyst - Grains & Oilseeds
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  • Stephen Nicholson

    Senior Analyst - Grains & Oilseeds
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