Sugar Stocks To Return To A Surplus in 2017/18

May 12 2017

Market Position
 
Sugar prices traded around 16-17 c/lb during April compared to 19.5-20.5 c/lb last October based on the perception that world supplies will be sufficient in the 2017/18 season. If India imports white sugar before Q4 this year, the world market price will likely increase. If these imports are delayed, Brazilian and EU surplus sugar is likely to enter the world market, reducing world market prices. However, sugar imports into China need to be taken into consideration. Our prediction is that the market will remain bullish as a result of a two season global deficit in 2015/16 and 16/17, with the 2017 season looking tight on both raws and white trading flows. The global deficit for 2016/17 is 5.3 mln tonnes. Global sugar production for 2017/18 is estimated to increase to 190 mln tonnes based on predicted increases in production from the European Union, India and Thailand. This compares with 176.9 mln tonnes produced in 2016/17. The result will be a global sugar surplus of 2.8 mln tonnes for 2017/18, with global
consumption increasing by 2% to 184 mln tonnes. Prices are unlikely to drop due to low stock
levels, but they are also unlikely to increase significantly.

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Europe
 
Wet weather in March delayed the sowing of beets in the Benelux, German and Netherland regions, although sowing is now 100% complete. The planted area is expected to increase
around 17% above 2016/17 season, potentially producing 20 mln tonnes (compared to 16.9 mln
tonnes in 2016/17) which would be the highest since 2005/06 and the first crop in five decades not subject to marketing limitations. Increases are expected also in Russia which produced 6.6 mln tonnes in 2016/17 and the Ukraine which produced 2.4 mln tonnes in 16/17. This could result in European production rising to 33.1 mln tonnes in 2017/18, the second highest since 1990/91. Currently, EU stocks have fallen to around 509,000 tonnes, significantly under the 1mln tonnes that resulted in special measures in 2010/11. However, the European Commission has withdrawn a proposal to reclassify some out of quota sugar destined for food and beverage producers prior to the market being quota free on 1 st October, after the sugar industry opposed the proposals. The European sugar industry supported by ACP countries say that there is enough sugar available until the next crop and that an increase on quota sugar prior to the reforms would only erode market prices, discourage preferential imports from ACP countries and stocks would rise excessively. Brazil’s import quota to the EU remains unfulfilled as a result of persistently low EU prises that have fallen below world prices in recent months. In the UK British beet growers have been guaranteed a minimum price of GBP 22 per tonne which could lead to sugar production of 1.4 mln tonnes for 2017/18, up from 1.0 mln tonnes in 2016/17.

Brazil
 
Cane crushing began in April. A mixture of wet weather, lower available area and ageing canes
(on average 3.6 years old) with poorer yields has resulted in early estimates for a decrease in
sugar production in 2017/18 at 35.2 mln tonnes. However there is still plenty of time for changes to the Brazilian harvest as a result of weather, sugar yields (as the plantations are in a
satisfactory condition) and the sugar mix over ethanol. The reduction in gasoline prices is
making the production of ethanol over sugar less attractive and sales of hydrous ethanol have
become less competitive due to expired tax support measures. The mills have more funds now
to invest again which has resulted in a replanting effort in recent months. The month of May will see stocks start to build up in the ports. The global deficit for 2017 is relying on Brazil to over perform again, currently the country is not adding much to any global surplus with export
forecasts at 28.28 mln tonnes, down 400,000 tonnes on last year.

Thailand
 
Dry weather is helping the 2016/17 cane harvest which began in December and is nearing completion. Sugar yields are up on last year due to ideal weather with plenty of rain during the
growing season. Sucrose extraction is up on last year at 11.08%, from an actual smaller crop.
To date the country has produced 10 mln tonnes of sugar compared to 10.2 mln tonnes in 2015/16. The government is planning on abandoning the current quota system for buffer stocks and also plans to relax domestic prices.

India
 
Uttar Pradesh cane crush has now come to an end with a smaller crop. Two years of reduced monsoon rains has reduced planted area in central India, resulting in a smaller yield with sugar
production for 2016/17 below consumption for the first time in seven years at 20.2 mln tonnes.
This is a drop of 4 mln tonnes over 2015/16 crop. The monsoon season forecast is rainfall at
96% of normal levels. The actual amount will impact on the 17/18 and 18/19 sugar production.
2017/18 harvest will commence in six months, production is expected to increase, but existing
stocks may struggle to meet consumption (24 mln tonnes) during the peak demand period of the year. A 500,000 tonne import quota for raw sugar was announced last month. Predicted tight stocks in Q3, will see white sugar imports required. These imports will directly affect the NewYork and London traded prices for sugar.

Southern Africa
 
Local market prices remain strong as a result of the drought during the last two seasons. The
2017/18 crop should be improved over the 1.5 mln tonnes produced in 2016/17 due to rainfall in
January.

Australia
 
The cane harvest is expected to commence in the next couple of weeks. Cyclone Debbie which hit Australia’s cane growing regions last month may have affected up to a quarter of the cane crop as a result of winds up to 250km/h and heavy rains of up to 250mm, which has caused heavy flooding and damaged to several mills. Early estimates predict that sugar production will be 300,000 tonnes lower for 2017 at 4.8 mln tonnes. Consumption remains stable at 3.7 mln tonnes.

Mexico/USA
 
Mexico’s export quota to the US has increased to 1 mln tonnes as a result of reduced sugar
yields and shrinkage of beets stored from the US beet production in 2016/17 and tighter stocks to use ratio. The 2015/16 Mexican sugar production of 6.1 mln tonnes is unlikely to be matched in 2016/17 due to lower yields from the current crop, despite a higher harvested area. US beet production for 2016/17 is estimated at 4.9 mln tonnes, down from 5.1 mln tonnes in 2015/16. US cane sugar production for 2016/17 has also been reduced to 3.8 mln tonnes, due to reduced sucrose recovery by producers in Florida and Texas. US sugar imports have been raised to 375,000 tonnes.

China
 
The 2016/17 crushing season is nearing its end. Domestic sugar prices have fallen in recent
months, reducing the likelihood of the government selling strategic stock. Lack of clarity over
import quotas and a possible increase in duty rate has seen a lack of demand for imported raw
sugar, leaving border traders to ship more white sugar through Myanmar. China has been the
world’s largest sugar importer over the last couple of years, with 6.2 mln tonnes coming into the country in 2015/16. The concluded beet production for 2016/17 reached 1.0 mln tonnes up from 839.9,000 tonnes in 2015/16. Cane production is nearing completion and is estimated to
produce 8.2 mln tonnes of sugar, bringing the country’s total sugar output for 2016/17 close to
9.2 mln tonnes, compared to 8.7 mln tonnes in 2015/16. Domestic consumption is around 15.4
mln tonnes leaving a shortfall of 6.2 mln tonnes which will need to be filled with world market
sugar, mainly from Brazil, Thailand, Cuba and Australia.

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BAKO WALES VISITS RAGUS MANUFACTURING

Jan 27 2017

Bako-Wales-Visit
Ragus Commercial Manager Frank O’Kelly toured the Berkshire Production Facility with Rob Evans Bako Wales Sales Manager, Richard Thomas Bako Wales Technical Sales Representative and Dyfed Evans Bako Wales General Manager. 
 
 
Representatives of the nationwide ambient, chilled and frozen food ingredients group spent an informative day at our Berkshire production facility, learning how Ragus manufacture the co-operative group’s Bako Select range of Golden Syrup and Treacle.
 
The complete manufacture of these products, developed and produced from Ragus’ own resources is based on our in-depth know how and talent, backed by a class leading level of service which the Bako Group have come to rely on for over 18 years of continuous national supply.
 
Bako Select range of handpicked products are all rigorously tested by their highly trained bakery and technical teams which only select the very best products which are delivered nationally in multi-temperature distribution fleet to allow a variety of ambient chilled and frozen products from the same vehicle to the nation’s bakers, coffee shops, confectioners, food manufacturers, hospitals and schools, all of who rely on exacting quality standards and service levels of supply.
 
 
 
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Two of the many products supplied to Bako by Ragus Pure Sugars.
 
 
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SUGAR PRICE TO FOUR YEAR HIGH DUE TO GLOBAL DEFICIT.

Oct 10 2016

Market Position

The markets remain volatile as we near the end of the Brazilian crop and start the northern hemisphere beet and cane harvests. Sugar prices have been slowly rising reacting to forecasts of two consecutive deficits in 2015/16 and 2016/17. Trading at 19.5-20.5 c/lb before significantly rising to a four year high at 24 c/lb, double the price to what sugar was traded at one year ago. Global production in 2015/16 reached a five year low at 169 mln tonnes, the biggest decline since 2009/10. Estimates for global production in 2016/17 are only slightly improved at 177 mln tonnes after last season’s sharp decline. The world market will remain in deficit during 2016/17.

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Global sugar market will remain in deficit during 2016/17.

Europe

The 2016/17 EU sugar beet crop will be the last grown to the production quota system. Northern sugar beet campaigns have just begun in Germany, Netherlands, Poland and the UK. Beet sowings earlier in the year were delayed due to wet weather, this has resulted in lower beet yields. Warmer conditions in late summer, early autumn have seen farmers leave beets in the fields to increase chances of recovery. The mild weather will also increase beet processing at the factories. Early estimates have reduced the sugar production for 2016/17 to 16.5 mln tonnes despite a 9.5% increase in EU planted area. Finland, Italy, Spain and the UK all reduced their beet cultivation to prevent over production. This has resulted in diverse sugar prices traded within the EU. The UK produced 1.0 mln tonnes in 2015/16 and is estimated to produce 0.9 mln tonnes in 2016/17 from a reduced contracted area. Russia produced 5.6 mln tonnes in 2015/16. Beet harvesting commenced in July, with favourable weather conditions, yields are higher this year, and planted area has increased by 5% which could see sugar production reach 6.1 mln tonnes. If this figure is achieved Russia will become self-sufficient for the first time.

Brazil

Favourable weather and plenty of stand-over cane allowed crushing to start early in March but was disrupted by wet months in May and June, followed by a long period of drought in the following months. This has impacted on agricultural yields and has lowered the sucrose content in the canes. Despite this the pace of the harvest has been strong, around 27% above last year. The tail end of the harvest may be limited, so mills have been maximising their sugar mix over ethanol while they can. Estimated sugar production remains around 34.8 mln tonnes for 2016/17.

Thailand

A long drought damaging newly planted canes has reduced any potential for an increased crop, despite rain in the last few months, so estimates remain the same as last year at 10.3 mln tonnes.

India

Improved rains during the monsoon season (which have now ended) has seen dams mostly full, which will allow the remainder of the cane planting to be completed. Higher world market sugar prices compared to stable internal prices are restricting much needed imports to offset reduced stocks. Significantly the start of the 2016/17 crush will begin shortly so the quality of the sugar, any change in government policy on import duty, currently at 40% and subsequent internal market prices will dictate the demand for world market sugar. Estimates for the 2016/17 crop are around 21 mln tonnes, a drop of 3 mln tonnes over 2015/16, a second consecutive reduction. A bumper harvest is predicated for 2017/18.

Southern Africa

Continuing drought for a second successive year is affecting the cane crushing forecast for 2016/17 and sugar production will be the same as last year at 1.5 mln tonnes. Swaziland a major supplier to the EU will see sugar production drop to 500,000 tonnes in 2016/17 from 700,000 tonnes last year.

Australia

Despite a dry start to the year cane crushing began in May. Rains in the last quarter have disrupted harvesting but millers are expected to meet crushing targets with sugar production estimated to rise to 5.2 mln tonnes.

Mexico/USA

Improved cane yields and higher sugar extraction will result in Mexico’s sugar production being at least 6.3 mln tonnes. The Mexican market is in surplus with high prices, so much of this sugar will end up being exported onto the world market, which to date has failed to materialise. If the sugar is not sold, the mills will end up paying the cane growers an extra 20% in the price for the cane. In the US they are predicting a record crop with beet sugar production rising to 4.8 mln tonnes and the cane crop rising to 3.6 mln tonnes, resulting in a reduction of the Mexican quota to 860,000 tonnes.

China

The Chinese government has released 350,000 tonnes from their strategic stock, following last year’s poor harvest, which will reduced the need for imported white sugar. This the government hopes will keep domestic prices stable for the 2016/17 season. Beet sugar production is estimated to rise to 1.0 mln tonnes. Cane production is estimated at 9.5 mln tonnes due to increased planted area.

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PURE SUGAR – PERFORMS & FUNCTIONS LIKE NO OTHER INGREDIENTS FOR CONFECTIONERS

Jul 20 2016

PURE SUGARS & SWEETENERS DEBATE WITH KENNEDY’S CONFECTION MAGAZINE

Ben Eastick welcomes Simon Rowley to Ragus
Ben Eastick welcomes Simon Rowley to Ragus.

Simon Rowley Managing Editor of Kennedy’s Confection visited Marketing Director Ben Eastick at Ragus headquarters in Berkshire.
His mission was to gain authoritative insight into the ongoing pure sugar versus sweeteners debate and the effects of upcoming EU sugar reforms.

The interview on these key issues is available here to download. It focusses on pure sugar as the essential sweetener and functional ingredient of the confectionery industry.
Also highlights Ragus’ many years experience and knowledge in sugar sourcing, manufacture and consultancy of specialist sugar products.

Kennedy's Confection-1
 
 
 
 
 
 
www.kennedysconfection.com
 

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Sugar Stock Reduction, Can Brazil Supply The Global Market?

May 19 2016

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EU sugar stocks are below the two month supply limit.
 

 
Market Position
With sugar stocks tightening and downward crop revisions for South Africa, China, India and Thailand as a result of the El Niño hit crops over the last six months the market is moving towards a large global deficit and rising prices. The New York raws market traded at 17c/lb last Thursday, the first time since October 2014. Despite these bearish predictions, the Brazilian harvest has commenced early as a result of ideal weather conditions since March, a large 2016 crop could prevent significant market prices rises by resolving the global deficit, although logistical problems remain and the political corruption scandal has strengthened the Brazilian Real. In the EU beet sugar producers are trying to keep stocks to a minimum before the end of the beet sugar quota system in October 2017. There is currently less than two months of stock.

Europe
Since the last EU sugar reforms in 2005, the Commission has had to use temporary measures in 10/11, 11/12 and 12/13 to prevent a shortfall in the availability of sugar, as a result of low production across the African, Caribbean and Pacific states that benefit from duty free access. High global sugar prices compared to EU domestic prices has made exports to neighbouring markets more attractive than exporting to the EU. In 2016 the EU is once again facing a shortfall of imports from ACP countries with preferential access and if imports don’t increase the EU Commission will be forced to intervene for a fourth time in the last 10 years. The options open to the Commission are to either reduce the duty on the import tender of raw sugar for refining or permitting the sale of over quota beet sugar that has been produced in the EU. Beet sowing in many EU countries was delayed due to wet weather, which will make a record sucrose yield in 2016/17 more difficult to achieve, despite a 9.5% increase in planted area. Very early estimates predict EU sugar production for 2016/17 at 16.9 ml tonnes, compared to 15.1 mln tonnes last year. The UK’s beet growers will receive £20.30 per tonne for their 2016/17 contract tonnage, £3.70 less than last year after British Sugar reduced contract tonnage by 20% for the 2015/16 campaign. For 2016/17 British Sugar will refine 1.1 mln tonnes in order to draw down existing stocks prior to the expiry of the EU quota system in October 2017. Increased production in Russia, Turkey and Ukraine is also predicated, estimated to produce 11.9 mln tonnes sugar.

Brazil
Last year Brazil’s harvest started in April and lasted until December, but was largely disrupted by rainfall for most of the harvest. For 2016 ideal weather conditions since March has allowed crushing to start early, with a prediction for a healthy and sizable crop. The month of May has been rainy after a dry April, but no significant disruption to the cane harvest has taken place. If the weather remains favourable a large sugar crop could put pressure on Brazil’s infrastructure to export, competing with larger grains and oilseeds output. Increasing prices and a positive sugar/ethanol parity will see millers diverting from ethanol to more sugar for 2016. Early estimates for 2016/17 could see sugar production at 35 mln tonnes.

Thailand
The tail end to the 2015/16 cane crop ended in April after dry weather conditions for the Thai harvest, produced 10.3 mln tonnes of sugar. The average rainfall remained around -18% for the five year average during the wet season. This has reduced the total recoverable sugar available for the 15/16 crop and could result in a lower output for 2016/17. Recent rains has allowed for the delayed planting to occur and has improved the yield potential for 16/17 crop, despite higher than average temperatures.

India
Like Thailand the total recoverable sugar available from the Indian 2015/16 crop has reduced due to lower monsoon rainfall, resulting in almost 3 million tonne drop on the sugar crop to 24 mln tonnes of sugar produced. India’s internal sugar prices have risen due to falling stocks, their lowest for 3 years, which has discouraged millers from exporting their sugar. If this continues into the 2016/17 season, India will need to import sugar over the next 18 months to meet local demand as the world’s largest white sugar consumer. The dryness caused by El Niño in the Monsoon period is likely to result in reduced planting of cane which will affect the 2016/17 crop.

Southern Africa
The driest weather in a century has caused severe draught throughout Southern Africa resulting in decimated crops, which has been exacerbated by a lack of irrigation in the cane fields. South Africa will need to import sugar and exports will be severally limited after sugar output for 2015/16 was 1.5 mln tonnes, the lowest for 10 years. Swaziland despite having 90% irrigation has dams that are near empty, this will affect the 2016/17 crop which has just started its harvest, estimated to be similar to last year’s and Swaziland’s ability to supply the South African market. Malawi, Mozambique, Zambia and Zimbabwe are also predicting a reduction in crop output where crushing begins in the next few weeks. Production is expected to be down 20% on the 14/15 crop. Imports to the European Union are already being reduced in quantity.

Australia
Dry weather continued during the ‘wet season’ with dams in Queensland running dangerously low of water. Many sugarcane farmers are unable to take advantage of their irrigation systems and face the predicament of having to plough up some the planted sugarcane, rains in the next 4 weeks will be crucial to save some of the cane crop.

USA/Mexico
The Mexican harvest will produce around 6.0 mln tonnes of cane sugar, an increase over 2014/15 as a result of improved agricultural and industrial yields. The smaller US quota of 1.1 mln tonnes may result in additional stocks, which would reduce domestic prices. Mexico has started exporting more refined sugar direct to US consumers, putting pressure on US cane refiners. US sugar cane production in Florida is forecast to be down by 2%.

China
China’s large strategic stock will be needed as a result of a second successive reduction in crop output. In the month of April China started buying a large amount of VHP raws from Brazil. There has been a reduction in planted cane area and a lack of investment in field renovation. Wet weather, in contrast to India and Thailand has also reduced cane development and resulted in poor crushing during the harvest.

 

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GOLDEN SYRUP, A BRITISH ICON – RAGUS’ LINK TO ITS CREATION

Apr 21 2016

Golden syrup produced by Ragus, one of the world's leading pure sugar manufacturers, from its advanced manufacturing site in the UK that also produces a range of pure sugars, blends and glucose products
 
Leading authoritative monthly magazine Octane, which covers the good things in life, have written about the iconic status and origins of Golden Syrup and its packaging.
You can read the full article here.

At Ragus we are rightly proud of our connection with this British icon and much loved food invention. Key to its creation and formulation in 1883 was my Great Grandfather Charles Eastick who worked with his brother John Joseph as the first chemists for Abram Lyle at the Plaistow Wharf sugar refinery.

charles and John Joseph Eastick_

Charles and John Joseph Eastick.

‘Later in his career in 1928 Charles founded and developed the Ragus company now with a pedigree of 87 years of UK  sugar manufacturing knowledge and expertise.’

 Today Ragus produce many Golden Syrups as part of our Pure Sugars product range.  All specialist ingredients used by food, drink and pharmaceutical professionals.  Included is our premium Eastick’s Golden Syrup which connects our illustrious founder’s name and identity to a traditional product for modern food production.

Eastick's Golden Syrup

The indispensable ingredient for baking biscuits, cakes, flapjacks, pastries and puddings.

Bicuits

tart

danish_ Flap Jacks

 

 

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www.octane-magazine.com

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