Sugar Quarterly Q3 2020
Rabobank’s short-term outlook rests on two major factors: 1) worldwide cane and beet harvests in Q4 2020, and 2) the significant role demand could play in Q4 2020, if and when pandemic-driven consumption declines appear in trade.
“Revisions that have lowered our 2019/20 deficit and created a small 2020/21 global sugar surplus point to a well-supplied market in the coming 12 months. In turn, this suggests that raw sugar prices will continue trading in a USc 11/lb to USc 13/lb range – constrained to the downside by Brazil’s ethanol parity and to the upside by India’s export parity,” according to Andy Duff, Global Strategist – Sugar.
“Still, there remain opportunities – Rabobank notes the expectations for an elevated white premium and a generous Far East premium. These stem primarily from a sharp fall in 2020/21 Thai exports and spell better prospects for global refineries and Asia-focused exporters alike.”
Broader market sentiment in FX, equities, and commodity markets will continue to drive volatility, particularly if/when they adjust the 2020/21 incentives for Brazilian millers. Furthermore, the emerging popularity of ag commodities among speculators and index funds adds a fresh dynamic to the global outlook.
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Where to go from here
Andy DuffHead of RaboResearch Food & Agribusiness - South America; Global Strategist - Sugar Read more
Maria AfonsoSenior Analyst – Sugar, Grains & Oilseeds Read more
Pablo SherwellLead of F&A Data Analytics - North America Read more
Charles ClackCommodity Analyst
Lief ChiangAnalyst - Grains & Oilseeds
Stephen NicholsonSenior Analyst - Grains & Oilseeds Read more