Czapp’s Most Read Opinions in November 2020

1. Day One of Our Cane Tour in Thailand’s Northeast

It’s the end of the first day of our cane tour in Thailand’s Northeast and wow.
I woke up at 4am today and was on a plane from Bangkok to Udon Thani by 5.30am. From here, I drove 250 kilometres on Thailand’s bumpy roads in 28° heat with only the sounds of Lo-Fi Hip Hop to keep me entertained.
However, it’s been immediately worth it as I’ve already gained a great deal of insight into Thailand’s 2020/21 cane crop.

2. The First Week of Our Thai Cane Tour (In Pictures)

A lot happened in Nate’s four-day cane tour in Thailand’s Northeast.
We therefore decided to use the pictures he took to summarise where he went, who he met and what he learnt.
We’ve shared a more detailed rundown of Nate’s findings and conclusions here.

3. Day Two of Our Cane Tour in Thailand’s Northeast

Today, I was up at 7am with 300km in front of me. After yesterday, this felt like a lie-in…
My day ended up being packed with impromptu meets all over Kalasin, as well as one pre-arranged meet with the President of the Cane Farmer Association.
So yes, all is going very well so far, bar the occasional ominous beep in my car I’m yet to get to the bottom of…

4. EU Slaps 25% Duty on Cane Molasses Imports from the USA

This week, it was confirmed that the EU is going to place a 25% tariff on cane molasses imports from the USA.
The US’ cane molasses is exclusively centred around Florida and the Port of West Palm Beach.
With the tariff now in place, how will this affect the molasses market?

5. Guatemalan Sugar Exports to Increase with Cane Crop Rebound

We think Guatemala will produce 2.8m tonnes of sugar in 2020/21; its highest production in two seasons.
This comes as the country has been graced with optimal weather for cane development throughout the year.
We think bulk raw sugar exports will continue to reduce as producers prioritise the production of value-added bagged sugar.

6. It’s Day Three of the Cane Tour and My Car Broke Down

Today, I woke up to the sound of heavy rain spatting against my hotel room window. I knew this meant one thing: mud, and lots of it.
Nevertheless, I’ve caught up with five people at the core of Maha Sarakham’s sugar industry today and almost all of them told me the same thing.
And that was that this year’s cane crop will be worse than last year, but they’re anticipating a rebound in both 2021/22 and 2022/23.

7. Chart of the Fortnight: Thai Cane Returns Hit Record High in 2020/21

The Thai cane price should reach THB 1,100/mt in 2020/21; the highest it’s been for a decade.
If so, this will likely incentivise farmers to switch back to planting cane as it becomes more profitable than cassava once again.
As such, we think the Thai cane production will be rebound in 2022.One of our analysts is currently on a cane tour in Thailand’s Northeast, so you can read all about what he’s learnt first-hand from the cane producers he’s met in our daily updates.

8. Market View: Is Sugar Breaking Out of its Decade-Long Downtrend?

We are concerned the sugar market could continue to rally into 2021.
The market is still waiting for news of India’s sugar export subsidy for the coming season.
Further into the future, concerns are already building over new crop raw sugar availability in May from CS Brazil.

9. How La Niña Could Impact Colombian Sugar Production

A fall in the temperature of the equatorial Eastern Pacific Ocean is called La Niña.
The impact of this varies by location, but in Colombia, it increases the amount of rainfall received at the end of the year.
Colombia’s cane harvest is year-round and higher rainfall can make it difficult for farmers to access cane fields.

10. Brexit Leads to Regulatory Changes in the Food Industry

The UK formally left the EU on the 31^st January 2020 with a transition period ending on 31^st December 2020.
With the EU accounting for 40-50% of UK food imports, previously traded goods will face new customs and border arrangements.
In some instances, there will be different protocols for Northern Ireland and Great Britain, but the proposed UK Internal Market Bill aims to reduce technical barriers to trade between the UK and the EU.