As I browse the web researching various topics concerning the EU and UK sugar markets, I've been bookmarking interesting weblinks. Some of these are news clippings, some are links to official documents, and some are interesting data sources.
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Transporting a 40-foot steel container of cargo by sea from Shanghai to Rotterdam now costs a record $10,522, a whopping 547% higher than the seasonal average over the last five years, according to Drewry Shipping. With upwards of 80% of all goods trade transported by sea, freight-cost surges are threatening to boost the price of everything from toys, furniture and car parts to coffee, sugar and anchovies, compounding concerns in global markets already bracing for accelerating inflation.
The total quantity of organic sugar imported into the EU27 was 189,831 tonnes compared with 206,798 tonnes in 2019. However, Germany, the top importer of organic sugar, increased imports strongly, followed closely by France.
“Our wish to become the sole owner of Limako reflects our ambition to become an international operator,” says Paul Mesters, CEO of Cosun Beet Company. “We want to be free to sail our own course on the world market in accordance with our strategy and vision, with Limako at the helm. Sole ownership puts us in a better position to bring our ideas to full fruition. Limako will continue to operate as an autonomous and independent trading company and ED&F Man will remain a valued international business partner for both Limako and Cosun Beet Company. To this end, we have concluded a new cooperation agreement.”
In the 2020/21 financial year, the annual sales amounted to 1.7 billion euros, up 3.8%. Cristal Union's industrial agility and its prudent and controlled management of agricultural and industrial structural costs are rewarded by the restoration of margin rates with consolidated EBITDA reaching € 201 million (compared to € 63 million over the previous year). In addition, at December 31, 2020, the amount of shareholders' equity stood at € 1,141 million, for a gearing ratio of 0.32x , an improvement, allowing the Group to continue its deleveraging and offering a margin of substantial manoeuvre for future investments. These good results have already led to a first increase in the remuneration of Cristal Union cooperative farmers, with an average price of € 25.5 per tonne of beet from the 2020 harvest. For the next season, the Group is in a position to to announce an average price perspective of 27 € / t, with the objective of reaching 30 € / t in the near future.
Britain and Australia are seeking to strike a trade agreement by mid-June, the British envoy said on Thursday, following another round of bilateral talks. Britain is pursuing a deal with Australia as one of the pillars of its post-Brexit strategy to build stronger commercial and diplomatic links in the Indo-Pacific region and pivot its economic centre away from Europe. Both countries in June said they have agreed on the vast majority of issues for a deal, which official estimates say could add 500 million pounds ($708.4 million) to British economic output over the long term.
Adjusted EBITDA at €465 million, up 11% at current exchange rates, reflecting the Group's resilience in the context of the health crisis. This improvement was driven by the rise in sugar and alcohol/ethanol prices and operational progress in the face of a poor sugar beet crop and a margin drop for starch activity in Europe. Debt leverage down to 5.5x; net debt of €2,533 million, down €24 million thanks to positive free cash flow of €65 million. Announcement of the strategic plan, based on three value creation drivers, which aims to achieve the following objectives in 2024: EBIT margin of 5%; recurring generation of positive free cash flow; net debt below €2 billion and debt leverage below 3x. For the 2021/22 crop, the rate of decline in planted surface areas is set to continue. Considering the expected rebound in consumption in the context of the end of the health crisis, the European market is still expected to be in deficit despite the improvement in agricultural yields.
Nordzucker closed the 2020/21 financial year with an increase in revenue and a significant operating profit. In the previous year, a loss of 14.6 million euros had to be reported. The realignment of the sales strategy, the significant streamlining of the organisation and comprehensive permanent cost reductions made the operating profit of 81.0 million euros possible. Very stable prices supported the positive business development. A small pandemic-related decline in sales hardly affected the good result. The majority interest in the second-largest Australian sugar producer, Mackay Sugar Ltd. (MSL) developed in line with expectations and again made a positive contribution to the Group result in the 2020/21 financial year.
The EU's Common Agricultural Policy is like a giant cash-filled piñata. The candies it contains are €270 billion of EU farm subsidies, and like kids on a sugar high at a birthday party, negotiators will spend the next few days in closed-door talks in Brussels, each trying to whack it as hard as they can.
Global production is forecast up 6 million tons to 186 million as higher production in the EU, India, and Thailand will more than offset the decline in Brazil. Consumption is forecast to rise to a new record due to growth in markets such as China and India. Exports are forecast up as the increase from Thailand along with strong exports from India will more than offset lower exports from Brazil. Stocks are forecast lower as stocks in Thailand are drawn down in favor of higher exports.
In the space of a week, what was slow progress on the Northern Ireland Protocol has turned into a dangerous stand-off. London has synthesised its critique of the EU's approach to the Protocol: it is guilty of a rigid approach to its implementation that is blind to unionist sensitivities. Europe’s insistence on checks and controls on food entering Northern Ireland from GB are disproportionate to the overall risk to the EU’s single market and consumer health. Unionist alienation is unsustainable, and therefore the Protocol, as is, poses a direct threat to the North’s institutions, and to the Good Friday Agreement itself. This is the charge sheet.
The sugar segment reported revenues of EUR 2,252 (previous year: 2,258) million, comparable to last year. Sugar sales revenues were higher but volumes were substantially lower, due in part to reduced sugar production during the 2019 and 2020 campaigns. In 2019, sugar production was down as a result of less cultivation and lower yields. In 2020, sugar production fell again follow-ing the factory shutdowns after the 2019 campaign, with beet yields again weak. In addition, lower demand from the sugar processing industry due to Corona virus containment measures had a significantly greater impact than the short-term positive effects of hoarding in the retail sector at the beginning of the fiscal year.
Brazilian exports of sugar to the UK rocketed in the first quarter of 2021 as a direct result of the UK’s post-Brexit tariff regime. Cambridgeshire grower and NFU sugar board member Tom Clarke described the increase in Brazilian exports as ‘Exhibit A’ for what the UK can expect in future trade deals.
Occam’s Razor: Commodity Prices… A couple of weeks ago, it was lumber prices. Now, it’s Dalian iron ore prices, which reached a record high of USD206 a ton. And copper specs, off from their highs but still elevated. And burlap. And tallow. Even animal hide prices are up (Figures 1-3). On this basis, we think it is fair to say that commodity inflation has well and truly set in, and has been passed on through to consumers. Prints like the 4.2% April US CPI aren’t just base effect.
Dan Gertler is not a household name, but for more than two decades, he has been the gatekeeper to the mineral riches of the Democratic Republic of Congo, the world’s largest producer of cobalt. The metal is crucial for batteries, meaning that Congo could play a similar role in the electric vehicle age to the one Saudi Arabia has played in the oil age — making Mr. Gertler a very important figure indeed.
The Economic Partnership Agreements (EPAs) are comprehensive trade agreements between the United Kingdom (UK) and African, Caribbean and Pacific States (ACP). Their background dates from when the UK was a member of the European Union (EU). In an effort to update its prior trade relations with ACP countries, and ensure compliance with the rules of the World Trade Organisation (WTO), the EU has negotiated and signed Economic Partnership Agreements (EPAs) with African, Caribbean and Pacific Group of States (ACP). These include seven (7) EPAs with Central Africa, Eastern and Southern Africa (ESA), East African Community (EAC), Southern African Development Community (SADC), West Africa, Caribbean, and Pacific countries. The trade relations between the UK and ACP countries after it has left the EU are largely based on these EPAs.
On being asked why does sugar prices go up so sharply on the futures market in NY? Mr. Arnaldo Luiz Correa – Risk Management Consultant & Director, at Archer Consulting explained, “This has been one of the most frequently asked questions in the last few weeks. Consensus has it that the market goes up because of the drought. The sugarcane crop failure we hear so much about varies depending on the source you go to for information. There are different kinds: from 5% to 30% reduction in sugarcane production in the Center-South, in comparison to the volume produced last year. We are talking about estimates ranging from 575 to 520 million tons of sugarcane.
The WTO Committee on Technical Barriers to Trade (TBT) conducts an annual review of the implementation of the TBT Agreement. This brochure provides ten key results from the 2020 review. The booklet focuses on members' compliance with notification requirements under the TBT Agreement and the concerns raised in the TBT Committee, often in response to these notifications. Governments are required to “notify” other members, through the WTO Secretariat, of proposed measures that may have a significant effect on other members’ trade and that are not in accordance with relevant international standards.
The European Union’s top court on Thursday upheld the EU’s partial ban on three insecticides linked to harming bees, preventing their use on certain crops. The European Court of Justice dismissed an appeal by Bayer (BAYGn.DE) to overturn a lower EU court's 2018 decision to uphold the ban. The ruling covers three active substances - imidacloprid developed by Bayer CropScience, clothianidin developed by Takeda Chemical Industries (4502.T) and Bayer CropScience, as well as Syngenta's thiamethoxam. A Bayer spokesperson said it was disappointed by the verdict and stood by the safety of the products, which continue to be used in other regions with appropriate risk mitigation measures applied.
The licensed sector lost 449.3 million litres of soft drink sales over the past year, the equivalent of around 180 Olympic swimming pools and approximately 80% more than the volume sales lost in foodservice. According to the latest Britvic Soft Drinks Review, the soft drinks category in this sector delivered just 39.5% of the value sales and 39.4% of the volume sales achieved in 2019. The Britvic Foodservice Soft Drinks Review is available to download here: https://www.paperturn-view.com/?pid=MTY160800
Exporters have ‘12-18 months’ to prepare as G7 paves way for trade digitisation. A new commitment made by G7 digital and technology ministers to adopt electronic transferable records in international trade transactions has been hailed as a “momentous step forward” for trade digitisation, and businesses are being called upon to get ready for digital trade now – or risk being left behind. At a meeting held last week, the intergovernmental organisation, made up of Canada, France, Germany, Italy, Japan, the UK and the US, agreed a framework that will champion the work of the United Nations Commission on International Trade Law (UNCITRAL) and promote the adoption of its Model Law on Electronic Transferable Records (MLETR).
A broad and powerful rally in commodities markets has gathered steam in recent weeks, fuelling expectations among some traders and analysts that a “supercycle” has kicked off as big global economies rev up in tandem. Strong demand from China, a boom in government spending on post-pandemic recovery programmes and bets on the “greening” of the world economy have lifted the price of many important raw materials.
British Sugar bosses have accepted the balance between risk and reward was "incorrect" during a beet campaign beset by bad weather and crop disease - following demands for better prices from disgruntled growers. The disastrous 2020/21 season saw yields ravaged by aphid-borne virus yellows disease in the absence of banned pesticides, while the driest May on record affected the crop’s establishment before heavy rain caused harvesting difficulties in the winter. Some growers lost thousands of pounds as yields plummeted, and some have quit the crop entirely, blaming low prices for failing to cover the rising risks.
"Yesterday history was made when the first shipment of sugar from Santander Sugar Group arrived at Romania,” said a Facebook post by The Santander Sugar Group, Belize. Santander did not specify the size nor value of the shipment. In its sixth year of operations, Santander expected to produce 75,000 tons of sugar from 750,000 metric tons of sugarcane. The company said it also expected to produce 30,000 tons of molasses and would generate 38 million kilowatt-hours of electricity for the national grid.
Après les 2 épisodes de gelées, la croissance en plaine est ralentie. Il est à noter une différence de 100° pour les sommes de températures par rapport à la moyenne. Le stade moyen est de 2 feuilles.
Adequate thermal and topsoil moisture conditions allowed for a timely start to the sugar beet sowing campaign in France, around mid-March. However, freezing temperatures recorded during the first dekad of April had a very negative impact on plants during emergence and early development, especially in the central regions. As a consequence of frost damage, approximately 10% of the sown sugar beet area in France needs to be re-sown. In Germany and Poland, below-average daily temperatures during the first and second dekads of March led to delayed warming of the topsoil, and hence some delay in the sowing campaign (7-10 days, compared with last year). Favourable thermal conditions and dry weather allowed for good sowing progress during the third dekad of March, while in April, cold temperatures and rainfall events slowed the pace of field operations. Nevertheless, the sowing campaign is close to being finalised in Poland, where 90% of the area had been sown by 20 April. Similar agrometeorological conditions prevailed in the Benelux countries, where sugar beet sowing has almost been completed, as well as in Czechia, Slovakia and Austria. Across western and central Europe, cold spells during the first dekad of April prolonged the emergence and early development of sugar beet and raised concerns regarding the health of seedlings. In the UK, agrometeorological conditions were favourable for a timely start to sugar beet sowing during the second dekad of March, and the sowing campaign was conducted under adequate seed bed conditions.
After more than a decade of continuous growth, the £104bn UK food and drink sector experienced a significant drop in exports in 2020 due to the impact of COVID-19. However, there remains “significant headroom for growth for UK food and drink exports, both within the EU and further afield”, according to a report by the Food and Drink Federation (FDF) and Santander. Ian Wright, chief executive, FDF, said that “food and drink exports are a UK success story”. Although exports fell by nearly a tenth (9.7%) in 2020, valued at £21.3bn, the industry was the UK’s biggest manufacturing sector by turnover, accounting for almost 20% of total UK manufacturing and employing 440,000.
Meat and dairy are regularly targeted for their environmental impact. In the UK, for example, the government’s Committee on Climate Change has recommended a 20% cut in meat and dairy by 2030, rising to 35% by 2050 for meat only. Sugar may be next, warns a report from AI data firm Spoonshot
Cosun Beet Company and Avantium plan to form the joint venture in 2021, with the aim to make an investment decision for the foreseen commercial plant in the first half of 2023 and commercial operations commencing in 2025. The joint venture is envisioned to be a world class producer of plant-based glycols to actively contribute to a fossil-free future.
The EU’s proposed carbon border adjustment mechanism (CBAM) risks unfairly penalising the exports of developing countries. If the mechanism applied to the imports of all goods currently covered by the EU’s Emissions Trading System, up to $16 billion of developing country exports to the EU could face an additional charge.