Miracle do happen... Brazil imports US Ethanol

High international price of Sugar worked as great incentive for Brazilian mills to turn to Sugar production rather ethanol.... Sugar production up 15% YoY and ethanol just 7% YoY....

The scarcity of sugar products in Brazil, the top producer, has led the country to turn to the US for corn-based ethanol to replenish depleted supplies of its own cane-based alternative, Agrimoney.com has learned. Brazil's North East region has, in an unusual if not unprecedented move, begun importing US ethanol to replenish supplies lost as soaring sugar prices encouraged mills to turn cane into sweeteners rather than biofuels. The move defies typical industry dynamics which, as sugar ethanol is less energy-intensive to manufacture than America's corn-based biofuel, typically makes Brazil's version significantly more competitive.

http://www.agrimoney.com/news/exclusive---sugar-squeezed-brazil-buys-us-ethanol--2888.html

India's yellow matar import on rise

India's peas import is at all time high... as on dec '11 it has surged 60% and is likely to remain on higher side only... Recent news on crop damages in MP due to cold has push domestic prices high and imports may remain attractive option for millers...

Sugar market update

Maharashtra quoting 27/- per kg duty paid whereas UP is around 29.2 duty paid... overall market sentiment is dull however buying likely to improve in next couple of days. Export ban delay has negative impact on market...

The Indian government would not be considering export of sugar under the open general license (OGL) in the medium term. The government may delay or cancel about 5 lakh tones of unrestricted exports under an open general license. Crushing is going on and supply is also good but the demand is limited, sugar millers preferred to wait rather than reducing the prices. However lower Free Sale Quota for February as compared to January is likely to trigger active buying in both spot and futures market

Sugar may not rally enough on Australian Flood

Was reading this article and this I think is making sense as Australia in Sugar space is a minor player and 20% damage in crop may have short-term impact of global sugar prices..

The floods in Queensland, which lifted world wheat prices on Monday, may prove less successful at supporting sugar values, even though the state is the centre of Australian production.

Phillip Futures analyst Ker Chung Yang forecast that sugar prices would "likely take a breather" in the short-term as rising hopes for Indian exports of the sweetener overcome concerns at Queensland's plight.

Queensland produces the vast majority of sugar in Australia, the world's third-ranked sugar exporter in recent seasons, after Brazil and Thailand.

However, sugar investors had already factored into prices the state's plight, which has brought the cane crushing season to a premature end, leaving an estimated 5.0m tonnes of the crop unharvested.

The Australian Sugar Mills Council last week estimated Australia's crush at 27.5m tonnes, the lowest for 19 years and 4.5m tonnes below initial forecasts.

"This has already been priced in, over at least the last two weeks," Mr Ker told Agrimoney.com.

Sugar - Economics or Politics

just read this article in mumbai mirror... wonder what prompt such decisions.. (ofcourse vote bank), but these same people will someday go to one village where all farmers depend upon Sugarcane, which they sell to Mills for making sugar and will promise them that they will get Rs. 2000/- ton of cane they sell to mills. Both sides they promise which can not be delivered... So this is politics....

Now lets look at economics...

In Maharashtra 100kg of cane can produce 12kg of sugar (world's highest recovery). So now mill purchases 10000 kgs of cane from farmer and pays him Rs 20,000 (10mts X rs. 2000) now mill crushes this and produces 1200kgs of Sugar (with 12% recovery). It sells sugar (as highlighted in paper cut) @ Rs. 9/ kg so mill will recover Rs. 10800/- by selling the same. So loss to mill will be Rs . 9200 plus all other expenses.

In both scenario both buyer n seller are looser.

I feel the focus must be on increasing yield/ area/ educating farmers/ making sustainable policies and not on playing such petty politics.

http://www.mumbaimirror.com/index.aspx?page=article&sectid=2&contentid=201010252010102502023782720643c88

Sugar 2011 - Its beyond India

http://www.agrimoney.com/news/sugar-needs-more-than-india-boost-to-ease-squeeze--2393.html

Currency War

gr8 article on how war of currency actually is war for natural resources. Good insight and thought provoking.

http://www.businessinsider.com/the-great-game-currency-war-resourses-2010-10?goback=.gde_3313852_member_32761627

India lifts ban on Sugar futures...

finally.. after lot of delays n hiccups FMC has lifted the ban on Sugar and now in few days most likely we'll have new contracts up n running.. sugar mills r gungho abt it.. so as traders... lets see hw it turns out to be in likely surplus season...

India resumes "EXPORT" of Sugar

Just heard this line from one of the brokers in Maharashtra almost a fortnight ago. He continued to say that soon this quantity will become from few thousand tons to almost a million or so ton. I argued that this is not possible esp when govt is under so much of pressure of inflation and even allowing wheat to rot then to export. Then he said that this is beyond pure demand - supply equation. Some mills had contracted raws/ whites at peak rates and now finding no domestic takers for sugar as market has crashed. So now option left is to re-export as world market is up on Brazilian port blockage. For that lot of media published on higher than expected 2009-10 season and now bumper 2010-11 season. All this looks linked up.... now whole world knows that India is surplus sugar country hence no one should raise voice to curtail export of sugar.. I think this is very smart....

To me this media highlight of Wheat rotting in FCI godowns also looks made up story to gain public/ political consensus to allow Wheat export.

What you say??? think over weekend and I will be back then with some clarity on these well marketed ideas.

Bull Run in Wheat - Impact of Russian Drought

Russia has become an increasingly important force in the global supply of grains. Russia provided 14.5% of global exports from the 2009-10 crop, according to the Food and Agriculture Organization. Moreover, it has played a key role in meeting rising import demand, exporting 17.5 million metric tons of wheat, up from less than one million in 2000-01 and the move to ban export has reignited fears that nervous governments will begin hoarding their own supplies, potentially causing a shortage. Nations that already are struggling to feed themselves are scrambling to lock in deliveries.

This bull run (wheat prices almost doubled globally in last 2 months) definitely will have some impact on India and ncdex prices have started to reflect that. However Govt is under tremendous pressure and with bumper crop and stock in India, prices here are less likely to go up. Now that gives India a natural advantage in International market. We can export so called surplus wheat (as media highlighting every day that wheat is rotting all across India due to poor warehousing).

Now the big question is - How wise it'll be open export window for Wheat???

Will share my thoits on that in my next post.. till then happy trading.. enjoy the weekend :)