by SignalFactory · October 18, 2019 | 07:36:03 UTC
Mr.
Orive forecasts “a global sugar deficit of about 3.5 million tonnes in 2019-20,
growing to nearly 6 million tonnes in 2020-21, compared with global surpluses
of 2.1 million tonnes in 2018-19 and 9.7 million tonnes in 2017-18.”
“The world is still suffering from high accumulated stocks that
will need to be absorbed by the market before we can see any improvement on
price,” Mr. Orive explained.
Mr.
Orive is optimistic because production from major sugar suppliers appears to be
declining, which will let stocks fall.
So,
this sounds like the oversupply of recent years is in the process of turning
into a global deficit.
Mr.
Orive continues:
We’re getting killed with consumption. The “war” on sugar, including sugar taxes in many countries. Recent years have shown a trend toward a slow but steady erosion in consumption. Annual consumption growth was about 2% in the mid-2000s but currently is below 1.5%. A considerable part of losses in consumption growth rates can be attributed to a slowing down in global population growth. But the sugar and health debate is starting to take its toll with the 2019-20 growth rate close to 1.39%.
And
then you have the big picture supply-demand factors suggesting a gradually
declining demand for sugar. This obviously offsets the global deficit that is
brewing.
The
unpredictability of the Sugar Market and How It Affects Our Sugar Price
Prediction
According
to Jack Roney, director of economics and policy analysis for the A.S.A., the
global sugar market is the most distorted commodity market in the world because
of subsidies. “Today’s low prices are a result of these subsidies, and any
bullish signals can be quickly undone by government intervention.”
Unpredictability of the Sugar Market and How
It Affects Sugar Price Prediction
Mr.
Roney said the extreme volatility of the world market is the reason the United
States has a sugar policy, and he urged governments around the world to put an
end to competing subsidies.
“U.S. farmers are highly efficient, and we want to operate in a
free market, but that cannot happen until all countries set aside their
subsidies and let a real market form,” he concluded.
This
obviously is a hugely important factor to take into account in the context of
our sugar price prediction. Supply-demand factors in the global sugar market
are certainly a leading indicator of the price of sugar. But an unpredictable
sugar market that can change fast, where the weather can turn the market upside
down, or a country suddenly can influence market dynamics makes a reliable
prediction extremely challenging.
As an illustration, this article on Indiatimes.com suggests that rising exports from India would lead to lower stock levels and consequently a mildly rising sugar price going into 2020. Based on a report the predicted sugar price rise is 8%.
All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user.
This website and all information is intended for educational purposes only and does not give financial advice. Signal Factory is not a service to provide legal and financial advice; any information provided here is only the personal opinion of the author (not advice or financial advice in any sense, and in the sense of any act, ordinance or law of any country) and must not be used for financial activities. Signal Factory does not offer, operate or provide financial, brokerage, commercial or investment services and is not a financial advisor. Rather, Signal Factory is an educational site and a platform for exchanging Forex information. Whenever information is disclosed, whether express or implied, about profit or revenue, it is not a guarantee. No method or trading system ensures that it will generate a profit, so always remember that trade can lead to a loss. Trading responsibility, whether resulting in profits or losses, is yours and you must agree not to hold Signal Factory or other information providers that are responsible in any way whatsoever. The use of the system means that the user accepts Disclaimer and Terms of Use.
Signal Factory is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered.
While Signal Factory believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Factory does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Factory to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all.
All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Factory assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information.
All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Factory are not responsible for your trading in any way.
The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Factory assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a merchant account or use the services, free of charge or paid, to any of the Forex companies mentioned on this website, bears full responsibility for their actions.
Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company.
Forex trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against merchants. Before each Forex investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results.
Neither Signal Factory nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.
