SUGAR REPORT | 27.03.2020 | LEVELS

Every time the market tries to stretch its legs and see what happens above 12.00, we see quite a bit of producer pricing show up and the market gets pressured back to unchanged. We are seeing very strong cash premiums for Brazil 150s, and the Month of March for Brazil exports is still the strongest we have seen since 2014. All the “extra” sugar that the world was seeing from Russia and India is now cut off from the market because prices are too low and India is on a mandatory 3-week nationwide lock down. Thus, we see the only place that would be pricing here are Brazilians, who are taking advantage of the cheap BRL. What is interesting to us is after we listened to Bolsonaro’s Speech on Tuesday, he mentioned that the only people who should be quarantining are 65+. A big part of the Brazilian is at risk of getting coronavirus. Our entire point to why market can rally is if we see broad based exposure to coronavirus with the people who actually are the ones driving the trucks of cane to the mills, the ones working in the mills, and those responsible for sugar coming to export markets. If this system was to see a work stoppage, we think that Premium will appreciate strongly.

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