About Czarnikow. The Premier Provider of Sugar Market Services. Czarnikow has been in the sugar business since 1861

Transcription

1 About Czarnikow The Premier Provider of Sugar Market Services Czarnikow has been in the sugar business since 1861 Czarnikow is the leading professional services company in the sugar market Czarnikow has a first hand presence in all major sugar markets of the world and employs over 1 professional staff

2 A Global Office Network New York Head Office London Moscow Dubai Hong Kong Mexico Nairobi Singapore Rio Historical Price Spikes c per lb 6 55 New York Spot Prices Oil Price Shock Oil Price Shock Suez Crisis Cuban Missile Crisis Last Post-Boom Trough Old Range The New Environment 15 1 Korean War

3 World Production and Trade Consumption 14m tonnes Cross-border trade 4m tonnes Domestic Use World Trade Raws Whites Preferential No.11 Sugar Price Cents per lb March 23 contract price spike. 8. India swings from exporter to importer Recent 6 month 8.c / 9.5c price range 5. Oct 2 Nov 2 Dec 2 Jan 3 Feb 3 Mar 3 Apr 3 May 3 Jun 3 Jul 3 Aug 3 Sep 3 Oct 3 Nov 3 Dec 3 Jan 4 Feb 4 Mar 4 Apr 4 May 4 Jun 4 Jul 4 Aug 4 Sep 4 Oct 4 Nov 4 Dec 4 Jan 5 Feb 5 Mar 5 Apr 5 May 5 Jun 5

4 Speculators vs. No.11 Sugar Price lots 14, 12, 1, 8, 6, 4, 2, -2, -4, Speculative Open Interest 1st Delivery New York No.11 c per lb , Oct 2 Nov 2 Dec 2 Jan 3 Feb 3 Mar 3 Apr 3 May 3 Jun 3 Jul 3 Aug 3 Sep 3 Oct 3 Nov 3 Dec 3 Jan 4 Feb 4 Mar 4 Apr 4 May 4 Jun 4 Jul 4 Aug 4 Sep 4 Oct 4 Nov 4 Dec 4 Jan 5 Feb 5 Mar 5 Apr 5 May 5 Jun 5 5. Freight Rates vs. No.11 Sugar Price US$ per day 5, Trans Pacific round voyage (Route 2) Cost and Freight price Monthly Average No.11 First Futures Cents per lb 11. 4, , 8. 2, 7. 1, Oct 2 Nov 2 Dec 2 Jan 3 Feb 3 Mar 3 Apr 3 May 3 Jun 3 Jul 3 Aug 3 Sep 3 Oct 3 Nov 3 Dec 3 Jan 4 Feb 4 Mar 4 Apr 4 May 4 Jun 4 Jul 4 Aug 4 Sep 4 Oct 4 Nov 4 Dec 4 Jan 5 Feb 5 Mar 5 Apr 5 May 5 Jun 5

5 Speculators vs. No.11 Sugar Price lots 14, 12, 1, 8, 6, 4, 2, -2, -4, Speculative Open Interest 1st Delivery New York No.11 c per lb , Oct 2 Nov 2 Dec 2 Jan 3 Feb 3 Mar 3 Apr 3 May 3 Jun 3 Jul 3 Aug 3 Sep 3 Oct 3 Nov 3 Dec 3 Jan 4 Feb 4 Mar 4 Apr 4 May 4 Jun 4 Jul 4 Aug 4 Sep 4 Oct 4 Nov 4 Dec 4 Jan 5 Feb 5 Mar 5 Apr 5 May 5 Jun 5 5. Trade Flows- Raw & White Sugar July 24 Outlook st Q'4 2 nd Q'4 3 rd Q'4 4 th Q'4 1 st Q'5 2 nd Q'5 3 rd Q' White Raw

6 Trade Flows- Raw & White Sugar June 25 Outlook st Q'5 2 nd Q'5 3 rd Q'5 4 th Q'5 1 st Q'6 2 nd Q'6 3 rd Q' White Raw Trade Flows- Raw & White Sugar June 25 Outlook White 2 nd Q'5 3 rd Q'5 Raw Small raw sugar deficit despite large Brazilian export programme (3.8m tonnes during Q3)

7 Trade Flows- Raw & White Sugar June 25 Outlook 4 th Q'5 1 st Q'6 2 nd Q'6 3 rd Q'6 White Raw Market back to 1m tonne trade surplus during 25/6 Trade Flows- Raw & White Sugar June 25 Outlook 2 nd Q'6 White Raw A potential raw sugar deficit during the 2 nd quarter could make the Trade interested in the March 26 futures contract

8 Trade Flows- Raw & White Sugar June 25 Outlook st Q'5 2 nd Q'5 3 rd Q'5 4 th Q'5 1 st Q'6 2 nd Q'6 3 rd Q' White Raw World Stock Change US c/lb No.11 Raw Spot Price Stock Change Million tonnes Early indications are that the statistics will be in balance during 25/

9 India Indian Swing Cycle Million Tonnes 4. Production/Consumption Difference Consumption Marginally higher production has reduced need for white sugar imports

10 Indian Imports 25 Raw Sugar Imports: 1.7m tonnes White Sugar Imports: now unlikely Indian Imports 26? Raw Sugar Imports: 1. m tonnes Small White Sugar Exports (ALS)

11 China Chinese Consumption 14 's tonnes New government regulations support Consumption growth

12 China Production Progress (cane & beet) 12, 1, 4/5 2/3 3/4 8, ' mt 6, 4, 2, Nov Dec Jan Feb Mar Apr May Jun China Factory Sales 1,4 1,2 24/5 23/4 1, ' mt Nov Dec Jan Feb Mar Apr

13 The EU Sugar Regime: a rough balance 2m Preferential Imports 5 m Exports = 2 m Production 17m Consumption Original Quota Cuts & Price million tonnes Euros per tonne 7 Proposed Quota Cut Proposed Price Cut /5 5/6 6/7 7/8 8/9 `

14 Revised Production Cuts & Price million tonnes Possible production Proposed Price Path Reference Price net of restructuring Amount Euros per tonne buy out price 625 buy out price 52 buy out price 2.4m tonne fall? 42 buy out price 1.7m tonne fall? 1.m tonne fall? 4/5 5/6 6/7 7/8 8/9 9/ ` EU Exports mtwv Strong possibility of record exports in final year WTO limit circa 1.3m tonnes /98 98/99 99/ /1 1/2 2/3 3/4 4/5 5/6 6/7

15 Main homes for EU Sugar Other Europe Imports circa 65k tonnes Far East Imports circa 1.75m tonnes Middle East Imports circa 1.16m tonnes West Africa Imports circa 36k tonnes North Africa Imports circa 755k tonnes Futures EU Exports? Switzerland, Norway and Israel import roughly 1m tonnes of sugar from the EU

16 Brazil Brazil Trade Balance US$ Bln (5) (1)

17 Real Chart Real/US$ /5/24 3/6/24 17/6/24 1/7/24 15/7/24 29/7/24 12/8/24 26/8/24 9/9/24 23/9/24 7/1/24 21/1/24 4/11/24 18/11/24 2/12/24 16/12/24 3/12/24 13/1/25 27/1/25 1/2/25 24/2/25 1/3/25 24/3/25 7/4/25 21/4/25 5/5/25 19/5/25 CS Region Sugar Production Cost Centre-South Region Own cane US$1.= R$2.93 (US c/p Sep/23) Plantations Investments Land Maint.. Adm. Cost of Capital Harvesting Loading Transport Cane Cost Ex-Mill Tolling Sugar Cost Ex-Mill Freight to Port Port Operations Sugar Cost FOB

18 CS Region Sugar Production Cost Centre-South Region Own cane US$1.= R$2.93 Current Values Plantations Investments Land Maint.. Adm. Cost of Capital Harvesting Loading Transport Cane Cost Ex-Mill Tolling Sugar Cost Ex-Mill Freight to Port Port Operations Sugar Cost FOB CS Region Sugar Production Cost Centre-South Region Own cane US$1.= R$2.4 Current Values Plantations Investments Land Maint.. Adm. Cost of Capital Harvesting Loading Transport Cane Cost Ex-Mill Tolling Sugar Cost Ex-Mill Freight to Port Port Operations Sugar Cost FOB

19 Brazil Cane Splits Anhydrous Alcohol Sugar Domestic Hydrous Alcohol Sugar Exports Ethanol and Flex-Fuel Sales units 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, Flexfuel Pure Ethanol Gasoline 12 Month Flex-Fuel Total Market Sales Trend 5, 45, 4, 35, 3, 25, 2, 15, 1, 5, units - Jan-1 Apr-1 Jul-1 Oct-1 Jan-2 Apr-2 Jul-2 Oct-2 Jan-3 Apr-3 Jul-3 Oct-3 Jan-4 Apr-4 Jul-4 Oct-4 Jan-5 Apr-5 -

20 Brazilian Ethanol Exports 24/5 8, 7, 6, 5, 4, 3, 2, 1, - U.S. India Netherlands Japan Jamaica Nigeria Korea Costa Rica Canada China Mexico Turkey Argentina Sweden Singapore Belgium El Salvador Finland Italy Caribean Ghana Spain Venezuela U.K. South Africa Dominican Rep. West Indies Tunisia Norway m3 Chile Expected Ethanol Exports 25/6 8, 7, Will rise to 1.2bln / year from 26 6, 5, m3 4, 3, 2, 1, - U.S. India Netherlands Japan Jamaica Nigeria Korea Costa Rica Canada China Mexico Turkey Argentina Sweden Singapore Belgium El Salvador Finland Czarnikow Biofuels indicative estimate Italy Caribean Ghana Spain Venezuela U.K. South Africa Dominican Rep. West Indies Tunisia Norway Chile

21 Brazilian Cane Production and Sugar Exports Projection 5 45 Cane Sugar Exports Projections mln tonnes mln tonnes /96 96/97 97/98 98/99 99/ /1 1/2 2/3 3/4 4/5 5/6 6/7 7/8 8/9 9/1 - Candidates for Change? Americas Europe, North Africa & Middle East Asia-Pacific

22 Historical Price Spikes c per lb 6 55 New York Spot Prices Oil Price Shock Oil Price Shock Suez Crisis Cuban Missile Crisis Last Post-Boom Trough Old Range The New Environment 15 1 Korean War