Simon Hood
Wilmar Manager Grower Marketing
February was a positive month for prices with growers using the rally to tidy up 2024 season Target and GMPRS pricing.
Additionally, with 2025 season prices breaking through $650/t, there has been increased scale up selling from Target price growers. There is, however, still plenty of 2025 pricing to go with only about 25 per cent of Target prices locked in at this point.
The rally has also allowed our 2024 season pools to be forecasting higher returns. We have incrementally locked in prices on the rising market to ensure any potential correction will have less impact on final returns for the 2024 season. Likewise, we have initiated hedging on the #11 sugar contract to put a floor under a portion of the new Managed Pool Plus for the 2025 season.
This initial positioning combined with some sub 62 cent currency is providing a good foundation for that pool return. However, there is still a long way to go for 2025 season pool valuations to be finalised. With the focus on 2025 season and beyond, let’s have a quick review of the current outlook.
Most analysts are currently forecasting a small production surplus (Wilmar 3.5m tonnes) for the 2025-26 season based on a large Brazilian and Indian crop. Brazilian forecasts are starting to be scaled back as continued dry weather through February downgrade yield expectations. On the flip side, Indian forecasts are being maintained as high domestic prices encourage crop expansion and a very good monsoon filled storage and moisture profiles.
Nominations for our 2025 season GMPRS pricing mechanism are now open. This remains a popular choice among Target price growers due the flexibility of being able to price all GEI sugar exposure – excluding the US quota proportion – from mid-May in each season. Typically, growers are cautious about pricing too much of the final proportion early in the season as price risk is replaced with production shortfall risk.
During March we will be holding a series of shed meetings to update growers with the latest analysis from Wilmar on the outlook for 2025 season and beyond. Get in touch with your local Wilmar Grower Marketing consultant to find your closest meeting.
Prices rallied in February, providing an opportunity for growers to tidy up 2024 season GMPRS and Target pricing
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