International Sugar Market Quarterly Outlook Analysis
The ISO 60th MECAS Meeting highlights currency movements, domestic prices, commodity prices, and fuel ethanol trends. The report discusses the performance of selected currencies against the US Dollar, domestic price changes in various countries, and the efforts of the International Sugar Organization to enhance the world sugar market conditions. Key highlights include fluctuations in currency values, rising domestic prices in the EU and India, and an overview of sugar commodity prices across different regions.
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ISO 60th MECAS Meeting Quarterly Market Outlook Pedro Arruda Economist June 7th 2023 1 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
ISO 60th MECAS Meeting Agenda Currency movements 1 Domestic prices 2 Commodity prices 3 Fuel ethanol 4 2 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Currencies Domestic Prices Ethanol Commodities Currency movements Selected currencies against the US Dollar US nominal broad dollar index falls to Feb-May Change FX Feb-23 Mar-23 Apr-23 May-23 Movement* lowest level since April 2022 Australian Dollar AUD 1.45 1.50 1.49 1.50 3.54% Brazilian Real BRL 5.17 5.21 5.02 5.02 -2.89% Chinese Yuan Performance of national currencies CNY 6.84 6.90 6.89 6.91 1.15% 0.93 Nominal Broad Dollar Index Jan 2006=100 Euro EUR 0.93 0.91 0.91 -2.82% have varied 130 Indian Rupee INR 82.60 82.29 82.02 81.78 -0.99% 125 120 Indonesian Rupiah IDR 14622 15278 14836 14680 0.40% 115 AUD, CNY, KRW, MYR, and RUB 110 Korean Won KRW 1269 1306 1320 1339 5.55% 105 depreciated Malaysian Ringgit MYR 100 4.38 May-18 4.47 May-19 4.42 May-20 4.46 Jan-21 1.90% Jan-22 May-21 May-22 Jan-18 Jan-19 Jan-20 Jan-23 Sep-18 Sep-19 Sep-20 Sep-21 Sep-22 Mexican Peso MXN 18.61 18.37 18.09 17.97 -3.46% Russian Rouble BRL, EUR, INR, MXN, THB RUB 72.91 76.16 81.18 79.29 8.76% Source: US Federal Reserve strengthened Thai Baht THB 34.00 34.50 34.28 34.12 0.35% * Upward movement signifies devaluation against USD 3 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Domestic Prices Currencies Ethanol Commodities Domestic prices EU domestic prices rise to a record in April 2023, latest reported month India wholesale price rise contained by higher government-set sugar quotas 4 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Domestic Prices Currencies Ethanol Commodities Domestic prices Domestic price changes in LCU and USD in selected countries 3-month change (Feb- Apr) Nov-22 Dec-22 Jan-23 Feb-23 Mar-22 Apr-23 ISA DP USD c/lb 18.47 18.93 18.87 20.23 20.52 24.14 19% BRL/tonne 2,636.54 2,782.37 2,679.51 2,641.73 2,639.96 2,820.58 7% Brazil USD/tonne 499.12 529.63 516.15 510.08 507.30 562.12 10% CNY/tonne 5,588.59 5,715.09 5,746.06 5,903.30 6,171.30 6,719.42 14% China USD/tonne 778.79 818.38 846.25 863.42 894.83 975.42 13% EUR/tonne 621.60 655.00 773.00 804.00 804.00 812.00 1% EU USD/tonne 632.63 692.69 832.51 861.57 860.66 890.56 3% INR/tonne 35,595.20 35,530.30 35,116.10 35,000.00 35,000.00 35,570.00 2% India USD/tonne 435.00 431.40 428.83 423.71 425.33 433.67 2% MXN/tonne 20,317.42 20,442.37 20,355.41 19,919.98 20,107.36 21,046.00 6% Mexico USD/tonne 1,043.69 1,039.29 1,074.53 1,070.31 1,096.09 1,163.96 9% RUB/tonne 48,829.88 51,055.91 51,975.26 54,977.89 56,062.60 60,717.90 10% Russia USD/tonne 803.07 778.17 755.03 752.62 735.78 747.95 -1% US USD/tonne 1,278.68 - - 1,322.77 1,322.77 1,322.77 0% 5 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Commodities Currencies Domestic Prices Ethanol Commodities Energy prices fell in the first quarter of 2023 Brent Crude oil fluctuated between USD72-87/bbl Natural gas prices in Europe and US fall sharply Remain elevated historically Agricultural commodity prices little changed between Q4 2022 and Q1 2023 Decline in grains prices offset by increased prices for most other foods 6 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Ethanol Currencies Domestic Prices Commodities Ethanol 2022f 2023f US US Brazil Brazil India India 7 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Ethanol Currencies Domestic Prices Commodities Ethanol prices Brazil hydrous and anhydrous prices rise in March and April, but fall in May Changes to federal and state fuel taxes US ethanol prices trended marginally higher EU T2 prices rose between January and March, but have since fallen 8 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Ethanol Currencies Domestic Prices Commodities Ethanol carbon markets US RIN prices ease in 2023, although remaining at historically high level US LCFS prices trend down, reaching lowest level since 2017 in February RenovaBio CBio prices move sideways so far in 2023 9 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Ethanol Currencies Domestic Prices Commodities Ethanol: US dynamics Production (Jan-Apr) marginally behind last year Ethanol prices not following developments in the corn and gasoline markets Exports down 10% in Q1 2023 vs Q1 2022 10 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Ethanol Currencies Domestic Prices Commodities Ethanol: Brazil dynamics 11 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Ethanol Currencies Domestic Prices Commodities Ethanol: Brazil dynamics Ethanol production from Cane trending down in recent seasons Corn ethanol production rising quickly 4.432 bln litres produced from corn in 2022/23, set to rise to around 5.5 bln litres in current season 12 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Ethanol Currencies Domestic Prices Commodities Ethanol: India 2022 a record year for production and National ethanol blending (December 2022 consumption. 2023 to establish new record. to April 2023) = 11.6% Government support for B-molasses and cane Ethanol received by OMCs under Ethanol juice to divert production from sugar. Blending Programme = 2.331 bln litres Procurement prices for ethanol raised. E10 target achieved, expected to rise to 12% Ethanol blended under Ethanol Blending blend in 2023, E20 in 2025. Programme = 2.175 bln litres 13 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
Conclusion / Summary US, Brazil, and India remain key to the global outlook next year US Production set to decline against 2022, while consumption raised marginally. Consequently, exports expected to fall in 2023. Brazil Significant policy developments affecting competitiveness of hydrous ethanol vs gasohol. Production to rise in 2023, thanks to better cane crop and fast-growing corn ethanol sector. Ethanol vs sugar parity, BRL strength are factors to look out for. India E10 target was achieved in 2022. Sugar sector accounted for nearly 90% of supplied ethanol. In 2023, a 12% blend is targeted, which would continue to divert greater amounts of sugar to ethanol production. On track for E20 in 2025. 14 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
ISO 60th MECAS Meeting Thank you Pedro Arruda Economist economics@isosugar.org 15 International Sugar Organization | Devoted to Improving Conditions on the World Sugar Market
