Rain in Brazil and drought in India, reduce the price - commodity price rally, investors expect
Off the coast of Brazil is the giant dam. All 122 cargo ships are in port or in advance and wait for their delivery. You are actually tons of sugar transport. But the sweet goods will not matter. Liability is the heavy rainfall that has drawn the harvest and transport routes affected. At the same time dry up on the other side of the world, in India, the weak monsoon much sugar can be.
For commodity experts such as Colin Fenton these weather vagaries are a clear indication that the sugar price is to be expected a rally. The sweet commodity is expected to increase this year, more than gold, says Fenton.
Also unusual weather in wheat ensures a price rally. The drought in Russia, burning forests and fields, destroying a part of the harvest of the largest wheat exporter. The November contract rose Europe by 5.6 percent to a two-year high of 206.25 euros per tonne. Thus, wheat is more expensive, within six weeks of almost 50 percent. Other wheat futures were not as expensive as since summer 2008. The U.S. contract at the Chicago Stock Exchange rose to $ 6.90 per bushel, in the meantime even well over seven dollars.
The cargo in Brazil to wait for a total of 3.62 million tonnes of bulk sugar, as shown by calculations of the analytical firm Santos Associados Consultoria and the shipping company Unimar Agenciamentos Marítimos. Low stocks in India are expected to cause the prices to attract "significantly," said Hussein Allidina, head of commodities at Morgan Stanley analysis.
But while the supply continues to decline, while rising global demand. The International Sugar Organisation (ISO) estimates that demand will outpace production this year by 8.5 million tonnes. As a result, the stocks must be addressed. The ISO expects that stocks will shrink to 32 percent of consumption - that would be the lowest figure in two decades.
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Against this background, the sugar price has already risen significantly and in July alone has risen 22 percent. Analysts surveyed by Bloomberg expect that the upward trend continues. For in the Philippines, India, Pakistan and Indonesia are the stock, "as good as empty," says the research company FOR Light.
"Sugar is a bull market developed," says Fenton, chief executive of commodities research company Curium Capital Advisors. Fenton bought exchange-traded securities, which are linked to sugar futures. It assumes that the prices soar up to the end of the year by a further 28 percent - at 25 cents per pound (0.45 kilograms).
29 July had reached the sugar on the ICE futures in New York at 19.67 cents a Viermonatshoch. On Tuesday, the price hovered around the 19 cent mark. Gold traded on the spot market at $ 1,188.50 per troy ounce. Analysts expect that will move the precious metal in the third or fourth quarter in a close range to the mark of 1200 dollar. This would correspond to an increase of 1.4 percent.
Last year, the price of sugar climbed 128 percent to the top, more than any other commodity in the Food Price Index of the United Nations. Then, too, were heavy rains in Brazil and dry weather in India triggers. This year we went down significantly once and even after the recent comeback, sugar is currently about 29 percent cheaper than at the beginning.
However, not only in Brazil and India, extraordinary weather conditions, press the sugar production. In other countries, especially Thailand and China, this can also be a stress factor, warns Leonardo Bichara Rocha, chief economist of the ISO. And in the European Union sugar beet harvest is likely to fail due to poor rains also lower. In the 180 days to 5 July was in West Germany, northern France, Belgium and the Netherlands, down only 60-80 percent of normal rainfall, data show the forecast company Martell Crop Projections.
"The bulk sugar market is in a critical situation in which marginal changes on the supply or demand can lead to parabolic price changes," said asset manager James Dailey of TEAM Financial Asset Management in Harrisburg, Pennsylvania. "Sugar seems to be well positioned to take in the next one to two years starting on the price high of the mid-70s."
