Analys
Allt för mycket socker
Alltför mycket socker i Indien har fått sockerraffinaderierna att efterfråga exportstöd. Sockerskörden i Indien, världens största producent efter Brasilien, väntas stiga till den högsta nivån sedan 2012, vilket ökar trycket på regeringen att subventionera exporten och minska lagren.
Sockerproduktionen förväntas enligt en undersökning som nyligen publicerades av nyhetsbyrån Bloomberg stiga till 26 miljoner ton under det år som började löpa den 1 oktober 2014. Om denna prognos nås är det den högsta nivån sedan 2011/2012, och en större skörd än den prognos på 25 till 25,5 miljoner ton som Indian Sugar Mills Association publicerade den 18 december 2014. Redan i dag finns det cirka 7,5 miljoner ton socker i lager hos de indiska sockerbruken, och ytterligare en stor skörd kommer att bygga på detta lager.
Subventioner, bland annat i form av transporter, bidrar till att underlätta för de sockerbruk som tvingas köpa sockerrör till priser som fastställts av den indiska regeringen, men de kommer också att bidra till att öka överskottet på den globala sockermarknaden och trycka ned sockerpriset. Den globala efterfrågan är helt enkelt för låg för att kunna hantera den indiska exporten. The International Sugar Organization bedömer att det globala överskottet från det skördeår som startade den 1 oktober 2014 kommer att uppgå till 473 000 ton.
Kan exportera 1,5 miljoner ton råsocker
De indiska sockerbruken kan komma att exportera 1,5 miljoner ton råsocker denna säsong, för vilka de får ett bidrag om 4 000 rupier, motsvarande 65 USD per ton. Transporterna har emellertid upphört från i oktober 2014 då den indiska regeringen suspenderade incitament för utlandsförsäljning.
Sockerbruken kan inte planera råsockerproduktionen utan beslut om subventioner, och den indiska regeringen arbetar på ett förslag rörande det sade landets livsmedelsminister Ram Vilas Paswan den 21 januari i New Delhi, utan att gå in på närmare detaljer. Att subventioner behövs råder det inget tvivel om. Indien behöver exportera 1,5 till 2 miljoner ton socker för att hjälpa producenterna att betala jordbrukare i tid och återbetala lån till bankerna, sade Indian Sugar Mills Association den 16 januari.
Bajaj Hindusthan (BJH), Indiens största producent, har sex raka kvartalsförluster, medan Balrampur Chini Mills (BRCM), det näst största sockerbruket, misslyckats med att redovisa vinst under fem av de senaste sex kvartalen. Shree Renuka Sugars (SHRS), det största raffinaderiet, har också rapporterat sex raka kvartalsförluster.
Sockerpriserna är i dag för låga säger Indian Sugar Mills Association, och hävdar att sockerbruken i dag inte har råd att betala ens det pris som den indiska regeringen har fastställt. Raffinerat socker i Indien handlas just nu till den lägsta nivån på tre år.
Indien exporterade 1,2 miljoner ton råsocker under året som avslutades i september inklusive 700 000 ton med statliga subventioner, enligt föreningen. Indien producerade totalt 2 120 000 ton socker under säsongen 2013-2014.
Sockerpriserna i Indien har fallit under produktionskostnaderna på grund av en svag efterfrågan och höga lager. Rösterna höjs nu bland både odlarna och sockerbruken att den indiska regeringen måste köpa minst 2,5 miljoner ton socker för att absorbera ett överskott som kan komma att öka till 10 miljoner ton i september 2015.
Om situationen inte åtgärdas omedelbart och sockerpriserna stannar på dessa låga nivåer, kommer sockerbrukens skuld till bönderna överstiga 130 miljarder rupier i mars och april.
Analys
Crude oil comment: A price rise driven by fundamentals
Brent crude prices have maintained their upward momentum, rebounding from last week’s low of USD 70.7 per barrel, spurred by relief over limited Israeli retaliation toward Iran, which left energy infrastructure (both oil and nuclear) undamaged. Since that point, as projected, prices have risen by USD 4.6 per barrel in just seven days.
This momentum has been further fueled in the last two days by changes in market fundamentals. Reports confirming OPEC+ plans to delay its previously scheduled oil production increase, originally set for December, have contributed to the continued rise, pushing prices up to the current level of USD 75.2 per barrel.
Late last week, Brent prices were also influenced by Iranian rhetoric, with Iran pledging further retaliation. The latest WSJ report suggests that Iran may be planning a ”strong and complex” response against Israel, likely after the US election. The report also notes that Israel’s October 26 strike inflicted significant damage on Iran’s air defenses, heightening tensions. While the timing of any Iranian response remains speculative, further hostilities between Iran and Israel appear very predictable.
Despite looming geopolitical uncertainty and the potential for a heightened risk premium, the impact of current market fundamentals remains significant. To our surprise, OPEC+ has confirmed it will postpone its planned December production increase of 180,000 barrels per day.
However, this deferral doesn’t remove the target of adding a cumulative 2.2 million barrels by December 2025. OPEC+ will continue to monitor the market, increasing supply as soon as conditions favor it, which will likely keep substantial oil price gains in check over the coming year.
Analys
OPEC+ holds back on December increase while US produces more
OPEC+ will not to lift production by 180 kb/d in December as planned. Of course an effort to prevent the oil price from sliding lower. US crude oil production is at the same time ticking up by 38 kb/d/month in September and the growth pace looks like it is ticking higher by the month as new US shale oil production is growing faster than losses in existing production. US crude oil reached a new, all-time high of 13.4 mb/d in August. The US is not making it easy for OPEC+. The group is trying to tell the US: ”Slow your growth, because we need to produce more!”. To no wain it looks. Iranian sabre-rattling helps to lift Brent this morning.
Brent crude fell 3.9% last week in a sense of eased Iranian-Israeli tensions. Brent crude traded in a range of USD 70.72 – 76.05/b last week and closed down 3.9% week on week on Friday at USD 73.1/b. The low point last week was driven by relief that the Israeli retaliation towards Iran looked fairly limited with no damage to either oil infrastructure or nuclear installations. Muted rhetoric from Iran Iran to start with also helped to drive the price to its low point last week. Iranian rhetoric with promises of re-retaliation increased through the week and the oil price rose along with that towards the end of the week. What is for sure is that there will be more rocket exchanges between Iran and Israel to come. That barrier is totally broken.
But tensions are rising again as Iranian re-retaliation is in the planning. News this morning (Wall Street Journal) is that Iran is planning a ’Strong and complex’ re-retaliation attack on Israel at some point after the US election. The article also states that the Israeli attack on Iran on 26 October severely damaged parts of Iran’s air defenses. This isn’t over.
OPEC+ holds back planned increase in December to avoid price declines. Brent rises 2% to USD 74.5/b this morning as OPEC+ decides to delay its planned increase of 180 kb/d in December. The planned increase of a total of 2.2 mb/d over a 12 month period has however not been called off. That still hangs over the market as a dark cloud. It tells the market that there is limited upside in the oil price in the year to come. Global demand acceleration in 2025 – OPEC+ will take that. Disruptions in supply in 2025 – OPEC+ will step in and take that. It is only a massive loss of supply involving the Strait of Hormuz which would be out of the hands of OPEC+ to cover.
US crude oil production at new all-time high in August of 13.4 mb/d. Not making it easy for OPEC+. US production reaches new all-time high in August at 13.4 mb/d. Monthly controlled data released in late October showed that US crude oil production increased by 195 kb/d to 13.4 mb/d and a new all-time high in August. US NGLs increase by 135 kb/d to 7.03 mb/d as well. If we add together US crude, NGLs, bio, refinery gains and adjustments, then total US liquids probably came in at 23.13 mb/d in August. With US liquids demand at 20.4 mb/d it leads to a net US liquids export of 2.7 mb/d
US shale oil production growth pace is ticking higher. US shale oil production grew at a marginal, annualized pace of 451 kb/d/month in September. The annualized growth pace was 401 kb/d in August. The pace is picking up. US shale oil producers are not making it easy for OPEC+.
US crude oil production reached a new all-time high in August at 13.4 mb/d. Production of NGLs also increased. US crude + NGLs + bio + refinery gains + adjustments puts US total liquids production at more than 23.1 mb/d in August.
US shale oil production grew at a marginal, annualized pace of 451 kb/d in. The growth pace is picking up as new production grows faster than legacy losses.
Analys
Brent rises on prospect of Middle East flare-up
Brent crude prices have extended their recent rally, reaching USD 74.3 per barrel this morning, marking a gain of USD 1.25 per barrel since last evening.
Earlier in the week, signals pointed towards a potential de-escalation in Middle East tensions, with Israel reportedly considering a US-led initiative to address the conflict in Lebanon. However, as noted in yesterday’s crude oil comment, Israel’s military chief issued a strong warning, vowing a significant response should Iran attempt further aggression.
Fueling the recent surge in oil prices are reports from Axios (an American news outlet) suggesting that Iran is preparing to launch a retaliatory strike on Israel from Iraqi territory in the coming days. This heightens the likelihood of additional hostilities potentially erupting before the US election on November 5th.
According to the source, the anticipated attack would likely involve drones and ballistic missiles, with Iran potentially relying on allied militias in Iraq to carry it out. This approach may be a strategic effort by Tehran to avert a direct potential Israeli re-re-retaliation on Iranian soil.
While the situation in the Middle East could escalate sooner than expected, both Israel and Iran seem reluctant to ignite a full-scale regional war. Thus, any additional responses from Iran might remain restrained, similar to Israel’s limited strike last weekend, hence primarily intended as a demonstration of strength rather than an invitation to open warfare.
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