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Sugar Outlook February 2003

World Sugar. Sugar Outlook February 2003. ISO Conference in Bali September 2002. Expectation of Continued Low Sugar Prices Production of 138-140mmt Consumption of 134 Stocks of 10 million. World Situation. Increase Consumption Due to: Anticipation of Iraq Conflict

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Sugar Outlook February 2003

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  1. World Sugar Sugar OutlookFebruary 2003

  2. ISO Conference in Bali September 2002 Expectation of Continued Low Sugar Prices • Production of 138-140mmt • Consumption of 134 • Stocks of 10 million

  3. World Situation Increase Consumption Due to: • Anticipation of Iraq Conflict • Weakening Dollar Against European and Asian Currency

  4. World Sugar Weekly

  5. What Has Happened since? Brazil’s Situation in the Market • Increased Export During Currency Devaluation • Shortage of Alcohol Between Harvests • Diminished Hedging/ Fixation in Anticipation in Alcohol Shortage

  6. Brazilian/Real Daily

  7. Crude Weekly

  8. Economic Investment Scenario Increased Speculative Interest in Commodities • Alternative Investment to Weak Stock Market • Record Speculative Interest in Sugar

  9. Commodity Research Bureau (CRB)

  10. Largest Exporters

  11. Brazil

  12. Europe

  13. Other Exporters

  14. Largest Importers

  15. Large spec position, vulnerable short (230.000) Reduced availability from Brazil due to alcohol shortage Faster loading rate of 3.000 tons a day/Cosan- 750 in 95/ Cooper 1.500 in 97 and 3.000 in 03 Russian Import needs with no noticeable import Iraq conflict is longer and deeper than negative thought Large Speculative position. Market overbought Absence of Physical Interest Large Inverse Attractive to Brazil for May Early Harvest Because of Alcohol Shortage Iraq conflict over shortly Sugar Prices for May

  16. Overview • Speculative Position is Excessive and Has Inflated Prices at Least 10% • Brazil Still has 50-70% of Their Crop to Fix. Or 110.000- 150.000 Contracts • Russian Has Imports to Still do 3.00-3.50 Million Tons 60.000-70.000 • Other Imports – Indonesia needed 600.000 Tones 12.000 • Market is too high but when we are talking about a money management problem it is hard to pick a top

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