Sugar, Stevia etc.

[b0rderc0llie]

Still tracking sugar? 25.7 already...

[Aspellian]

If sugar so high - the F&B or choco companies will be badly affected...

any idea which companies here uses choco as raw material and produces choco products for end consumers? their margins will be superbly affected!

[winston]

Tesco Rations Sugar in Malaysia as Price Surge Boosts Smuggling
By Ranjeetha Pakiam

Sept. 4 (Bloomberg) -- Kuala Lumpur baker Serene Chin is having trouble keeping her egg tarts sweet. A sugar shortage prompted her local Tesco Plc hypermarket to impose a 2 kilogram- per-customer ration, forcing her to make several trips a week.

“This current shortage is really tiresome,” said Chin, who normally buys 48 kilograms at a time for her John King’s bakery. “Sugar is necessary for the people.”

Supplies of the sweetener are scarce in Malaysia because of a global shortage and a decades-old government price cap that encourages people to smuggle sugar across the border into Thailand, where it fetches double the price. Almost every vehicle stopped at the border is carrying controlled-price items like sugar and cooking oil, said Domestic Trade and Consumer Affairs Minister Ismail Sabri Yaakob. Customs has begun 35 investigations, more than twice the number last year.

“If you put a ceiling on local prices, when the difference between global and local prices widens, it makes no sense to retailers to sell sugar domestically,” said Suhaimi Ilias, chief economist at Maybank Investment Bank Bhd. in Kuala Lumpur. The government needs “more flexible price controls.”

Raw sugar futures have doubled this year to a 28-year high, after India, the biggest consumer, had its driest June in 83 years, reducing domestic supplies, and crops in parts of Brazil, the largest grower, were wrecked by rainfall four times more than normal. Malaysia spent 720 million ringgit ($204 million) on sugar subsidies this year, Ismail said.

World Shortage

World demand for sugar will exceed supply by as much as 5 million tons over the next 12 months, the International Sugar Organization estimates.

In Malaysia, the price is set at 1.45 ringgit per kilo, or 1.55 ringgit in the eastern states of Sabah and Sarawak. In Thailand, the world’s second-biggest exporter, it can fetch as much as 2.90 ringgit, Ismail said.

Malaysia introduced price controls on essential items in 1974 to ensure food security and cushion volatility in the commodities markets. To prevent a run on sugar in the shops during the monthlong peak demand period of Ramadan, which started Aug. 22, retailers are rationing supplies.

Enforcement agencies have stepped up border checks and wholesalers who are caught hoarding sugar will be stripped of their licenses and blacklisted, Ismail said. About 10 tons of sugar have been confiscated from people carrying the sweetener over the Thai border this year, the Customs Department said. Under the 1967 Customs Act, sugar smugglers face up to three years in jail or a fine of at least 100,000 ringgit, or both.

Ramadan Fast

In an effort to meet higher demand before Ramadan, when Muslims break their daylong fast with large meals at dinner, sugar refiners including Malayan Sugar Manufacturing Co., a unit of Robert Kuok’S PPB Group, and Central Sugar Refinery Sdn. Bhd. increased production 20 percent in August to 120,000 tons a month, Ismail said. The state compensates refiners for selling a set quota of sugar below cost, based on their 2008 sales.

No more than 10 percent of locally made sugar is exported, said domestic trade ministry Secretary-General Mohd Zain Mohd Dom. Manufacturers are slowing production as the subsidy for the year is running out, the Star newspaper said, citing Mohd Zain.

“If panic buying continues, no matter how much we load, sugar will run out in the shops,” said Ismail.

Ministry investigations show the black market price for sugar ranges between 1.50 ringgit and 1.70 ringgit, he said. The government has offered a reward of up to 10,000 ringgit to anyone with information on hoarders or smugglers.

Tesco Order

Food stores across the country are rationing sugar supplies of have run out, local newspapers reported. Tham Weng Tuck, grocery manager at the Tesco store, said supplies were less than ordered and may not be enough during the festive season.

“We may order 2,000 kilograms, but only 1,000 kilos are delivered,” said Tham.

Marlene Kaur, corporate affairs director for Tesco Malaysia, said the temporary 2kg ration was required by the government “to minimize any possible shortage of supply.”

Muhammad Sha’ani Abdullah, secretary general of the Federation of Malaysian Consumers Associations, said the government should set up a database so that subsidies go only to the poor and not to industries that use sugar in their products.

“We don’t agree with subsidies across the board because it is very wasteful and goes to the non-target groups,” said Muhammad Sha’ani. “Subsidies are given to provide a safety net for the lower-income groups.”

He suggested that sugar be sold at higher prices for bakeries and wholesalers, or that subsidies be given in the form of low-cost housing or cheaper public transport.

Subsidy Defense

Ismail dismissed any suggestion of removing subsidies. “The government gives subsidies to help the people,” he said.

Instead, he said, the government would step up efforts to stop the smuggling, including handing out leaflets to people crossing the border, informing them that it is an offence to take out large amounts of controlled price items.

Malaysians consume an average of 26 teaspoons of sugar a day, compared to 17 teaspoons in the 1970s, S. M. Mohamed Idris, president of the Consumers Association of Penang, said in a statement dated July 24.

“An increasing amount of sugar consumed by the public is in industrially prepared drinks and food,” said Mohamed.

Other price-controlled items in Malaysia include gasoline, diesel, wheat flour, white bread and cooking oil.

As for Chin, the sugar shortage has forced her to look beyond the hypermarkets and source the sweetener from suppliers who charge 1.70 ringgit per kilo, although the price of her egg tarts remain the same at 1.80 ringgit each.

“I have no choice but to pay more,” she said.

[kennynah]

“I have no choice but to pay more,” she said.

eventually, when she finds selling those egg tarts at rm1.80, no more lucrative .. she will either reduce the quality or increase the price...

[helios]

If sugar so high - the F&B or choco companies will be badly affected...

any idea which companies here uses choco as raw material and produces choco products for end consumers? their margins will be superbly affected!

ABR Holdings?

The listed Co. that deals with CocoaTree brand ... but recently they executed some publicity mileage for the Swensen's at Ion Orchard ...

[kennynah]

BC : sugar shot up to >$26 last week.... must have been a heart attack man....

but it seems, last Fri...saw a major tanking effect....hope you ok man...

[b0rderc0llie]

Haha, no problem. I like the fluctuations, the more the better

[winston]

Sugar’s ‘Perfect Storm’ May Triple Price by June, PFGBest Says By Yi Tian

Sept. 25 (Bloomberg) -- Sugar futures may triple to the highest price since 1974 as a “perfect storm” of technical and fundamental indicators “come together in a pretty strong way,” said Martin Snow at commodity broker PFGBest.

http://www.bloomberg.com/apps/news?pid= ... 35NB7O7MBM

[winston]

Sugar Set to Drop - and Drop Big by Lee Lowell

I profiled sugar as a potential shorting opportunity back in late August. At the time, it had carved out highs not seen in over 28 years, due to supply concerns in two of the world's biggest sugar-producing nations - Brazil and India.

As with any market making new highs or lows, there comes a point where all the fundamental data gets factored into the market. It's then a question of how long can those prices hold. For sugar, I believe the time has certainly come for the market to drop - and drop big.

In fact, the March 2010 sugar futures - the most actively traded contract - have already started to crack. If you want to play the downside, you could buy limited-risk put-option contracts for the March 2010 or May 2010 expiration periods. These contracts trade on the floor of the NYBOT/ICE exchange in New York City.

Source: Investment U

[winston]

THE HOTTEST COMMODITY OF THE DECADE

Jim Rogers was right.

Early this decade, the former hedge-fund superstar Rogers told anyone who would listen to buy commodities like lead, oil, and copper. He even wrote a book about the big trade, called Hot Commodities.

One of Jim's top commodity picks back then was sugar. He even passed around sugar packets at investment conferences to drive the point home.

As we close out the decade of the "aughts," we see sugar is the top-performing commodity of the last 10 years, up 321%. Demand is growing, and awful growing conditions in major producing countries Brazil and India have driven the sweet stuff to its highest level in over 20 years. Well done, Jim!

Source: Brian Hunt, Daily Wealth