According to the ISO (International Sugar Organization), the sugar consumption in China is expected to grow up to 16,25 million tons this season (it started on October 1st). The previous figures stay around 15.8 million tons. At the same time, the demand for sugar in Indonesia is expected to increase from 5.74 up to 5.92 million tons this season.
According to the report published by Crop Progress (USA), the US harvesting season is underway, with only 10% of the beetroot crop being harvested at this point. For comparison sake, this time last year, it was 18% while the 5-year average stands at 14%.
A couple of days ago, the market of sugar futures saw the biggest delivery in 24 years - 29,344 lots or 1.49 million tons. There was the only buyer - Louis Dreyfus, a big-scale agricultural group. Meanwhile, traders cannot estimate this delivery since it is unclear whether it is a bearish or a bullish sign for the global market of sugar. Some traders tend to think that this is a bearish signal since there only one buyer. Other say that the sing is bullish since the company bets on the probability of export issues in Brazil due to the poorer-than-expected harvest.
According to the UNICA, the sugarcane harvest in the South and Central regions of Brazil (90% of the crop) is expected to be 2.6 million below the forecast, which is 587 million tons. On top of that, rains in Brazil are affecting the harvesting campaign.
The USDA anticipates excessive supplies of sugar in the USA in 2014. The amount of excessive sugar is around 2.3 million tons.
The bottom line: the market is currently influenced by short-term factors while there is no global-scale changes. The harvesting issues in Brazil can be easily compensated by means of higher yields in Asia. The bias seems to be neutral.
The report is brought to you by the Commodity Trading Department of Masterforex-V Academy.
