May 18, 2015
Sugaronline | http://goo.gl/GftNH2
White sugar prices in the Mediterranean are expected to rise above Eur500/mt for the next campaign, according to Platts, as sources suggest expected sugar shortages in the region will push prices above the current lows.
"The Mediterranean remains a deficit market, and offers for the next campaign are difficult to find," one buyer said.
Prices for the 2015/16 campaign, starting October 1, are expected to increase as sugar will have to be brought in from elsewhere, either from central Europe or via imports under the EPA or CXL-schemes, which will push transportation costs higher, several sources said.
Whether CXL imports, which pay a Eur98/mt duty, will be imported "remains to be seen," one sugar distributor said. Beet producers in Western Europe will most likely sell their surpluses first below the CXL parity, in order to take market share from European cane refiners, he said.
Initial deals in Spain for the next campaign are reported at Eur495/mt (delivered), "at a relative low price," the buyer said, as he sees prices climbing up to Eur520-530/mt, well above the current spot price.
The spot price in the Mediterranean (delivered) was last assessed by Platts at Eur450/mt on May 8.
Producers in Italy are selling above Eur500/mt but buyers are not settling yet, one Italian trader said.
Prices in Western Europe will increase as well on low quota stocks and a decreased beet acreage but are expected to reach Eur470-480/mt, some buyers said, up Eur30-40/mt from the current spot price.
Initial deals for the next campaign in Western Europe are quoted at Eur440-450/mt, just above Platts current assessment of Eur440/mt.
This means that the spread between Mediterranean prices and Western European prices will climb from a current Eur10/mt to a potential Eur50-60/mt.