World Sugar Outlook 2008
FAR Brazil colleague Andy Duff, in a new report, highlights the current disparity in the world sugar market – while market fundamentals for 2008 are weak, prices have rallied by 30% since December 2007. Currently, world raw sugar prices are trading between 12 and 13 c/lb; in contrast, Rabobank´s world sugar price model, based on key fundamental indicators, suggests an average price for 2008 of 10.3 c/lb.
The model projects higher prices for 2009, averaging 12.9 c/lb, as a result of improving market conditions. Thus, while the fundamental picture certainly suggests that there is light at the end of the tunnel, it also implies that it will take some time to reach it.
The contrast between current prices and market fundamentals illustrates that the growing presence of the funds — a catch-all term encompassing institutional investors and money managers — in the market has added a new and at times pivotal influence on market sentiment.
Would you like to read more? Being a business client of Rabobank means access to our complete reports.
Click here to find the global network of Rabobank via the service and location finder.