Sugar Traders Deliver Cautious Message

Simon Hood
Wilmar Manager Grower Marketing

We recently completed a roadshow through Wilmar’s four milling regions with senior sugar traders, Peter Bingham and Neil Foo.

Peter and Neil work with Wilmar International and travel to Queensland once a year to meet with growers who choose Wilmar to market their GEI sugar. Peter is based in London while Neil is based in Singapore.

Their overarching message was for growers to be conscious that we may not see the elevated prices we witnessed in the last couple of years. The primary cause for caution on the outlook for #11 sugar pricing is based around the rapid ramping up of Brazilian cane production and crystallisation capacity.

Peter delivered a Brazilian masterclass, highlighting how acreage under cane had expanded. A 300,000 increase in 24/25 season hectares has essentially erased the previous eight-year steady decline in area under cane.

Additionally, millers have been aggressively investing in crystallisation capacity by converting ethanol- only factories to dual sugar/ethanol output. The increased acreage and sugar-make capacity has our projection for this year’s Brazilian sugar production to be at 42.2m tonnes – similar to last year’s record production.

The supply response in Europe, China and Thailand is expected to see a trade surplus for this year and beyond. India is expected to have a larger crop as well, but will not be a trade participant as domestic consumption and increased ethanol production will soak up the extra tonnes.

Overall consumption is expected to stay solid but the key importing countries of China and Indonesia are reasonably well covered in the short term and have sufficient stocks for them to sit out of the market for some time.

Peter and Neil were clear in their delivery that this is a forecast, which is based on modelling, which relies on assumptions, which relies on information known at the time. We could be wrong. No one was able to foresee the massive tail end of the Brazilian harvest in November 2023, which caused the spectacular collapse of #11 from US 28c/lb to sub 20c/lb.

The good news is that demand for Australian sugar remains strong into our traditional markets of Japan and Korea. Our 24-season physical sale program is well advanced and the large premiums that flowed into the Allocation Account for 23 Season are likely to be repeated this year – albeit at a slightly lower level.

Peter and Neil enjoyed their annual roadshow and look forward to returning next year.

‍

Senior Sugar Traders Peter Bingham and Neil Foo were impressed by the size of the cane grown in the Burdekin. They visited one of Wilmar’s farms at Mona Park as part of the annual roadshow
‍

Wilmar’s Grower Marketing team spent some time on farm during the roadshow. Pictured from left are, Risk Manager Bevan Patterson, Grower Marketing Consultant Meghan Wilson, Business Development Manager Owen Richards, Senior Sugar Trader Peter Bingham, Manager Grower Marketing Simon Hood and Senior Sugar Trader Neil Foo
‍

Senior Sugar Trader Peter Bingham (left) with Burdekin grower Mario Mio and sons, Sebastian and Oliver
‍

Burdekin growers Ben and Billie Nielson with Burdekin Grower Marketing Consultant Fiona Villis at the recent roadshow event, held at the Burdekin Theatre. Photos supplied

‍