REPORTS

Prices 
2020 started with prices falling in the sugar market. But it didn’t last long, and by Friday some gains were seen following the surge in crude oil due to the worrying situation in the Middle East, with NY11 front month recovering to 13.31c/lb, 23 points less than the previous week. Depending on how the US-Iran tensions pan out from here, we expect to see increasing oil prices which will be supportive for Brazilian ethanol quotes (depending on the FX), indirectly affecting sugar. Crop progress results from the two most important producers of Asia (Thailand and India) showed little change from the trends we have been seeing in December – namely of a slow moving crop. Elsewhere, in Brazil, rainfalls are continuing to show good improvement. Centrals are showing mixed results but remain overall in line with the past season indicating that production is likely to be similar to the previous crop. Mexican sugar, as expected, is out of the World Market and might be even further removed depending on the WASDE results that will be released at the end of the current week. Hydrous ethanol prices continue escalating, reaching almost R$2.05/litres in the past week, 1.46% higher WoW and 23% YoY. It is worth noting the White Premium that has been slowly increasing, reaching close to US$65/ton levels. We would expect India to make the necessary moves to cap continued gains.