Südzucker International Finance B. V. Südzucker AG ... - Xetra

Global and EU marketdevelopments12.5 million tonnes on world markets. Brazil thusclaims almost one-third of the entire world-wideexport volume of some 40 million tonnes of sugar.Speculation affects sugar priceAs expected, world sugar production exceeded worldconsumption by 4.5 million tonnes and hence theworld stock of sugar rose to a new record of 67.5million tonnes, equivalent to half global annualconsumption. Despite awareness of this overcapacity,sugar prices rose briefly to US $ 240 pertonne. This was mainly attributable to funds which,due to a lack of alternatives, were invested incommodities such as sugar to an extent notpreviously known. Fund involvement in the sugarmarket briefly exceeded 5 million tonnes, which werewithheld speculatively from the market and hencegave rise to a speculatively induced shortage. Theunusual significance of this speculative elementcaused considerable uncertainty amongst producers,traders and buyers, particularly because these stockswill weigh on the market at a later date. This is alsoreflected by the unusually high volatility of the worldsugar price.Real export activity on global markets is mainlydetermined by Brazil which, with an estimated sugarproduction of 22 million tonnes, may export someGlobal market prices for sugarMarch 2000 to February 2003London, Ww. in US-$/tonne, nearest forward trading month350300250200150100500March2000Sept.2000March2001Sept.2001March2002Sept.2002Feb.2003World Trade Organisation negotiations still openAt the start of negotiations for a new round of WorldTrade Organisation negotiations in Doha the WTOmembers committed to agree by March 31, 2003 ona framework within which the various WTO memberswould submit recommendations by the end of 2003to reduce their subsidies. However, the individualrecommendations are so far apart that, as expected,it was not possible for agreement to be reached ontime.The suggestion made by Stuart Harbinson, the headof the WTO agricultural negotiations, would require adecrease of 60 % in customs duty for the Europeansugar sector. The recommendation of the EuropeanCommission to reduce customs duties by an averageGlobal sugar production and consumption1,000 t raw value2000/011Estimate.131,589131,4802001/02 138,124136,1572002/03 1 142,640139,421Global sugar production 2Global sugar consumption 2Beet sugar as apercentage of totalproduction 32000/01 28.146.82002/03 1 25.645.12001/02 24.245.5Inventories at August31 as a percentageof consumption 22F. O. Licht’s Europäisches Zuckerjournal No. 11 dated09.04.2003 “Second Estimate of Global Sugar Levels2002/03”.3F. O. Licht’s Europäisches Zuckerjournal No. 7 dated03.03.2003 “Second Estimate of Global Sugar Production2002/03“.F-59