Sugar prices to avoid dive despite better supplies

tải xuống (15) Sugar prices are not set for sharp drop in 2011-12, despite a return to a healthy world production surplus, as countries – notably China – rebuild stocks depleted by successive years of squeezed supplies.

The International Sugar Organisation, in its first official forecast for 2011-12, said sugar production would exceed demand by 4.2m tonnes, the first substantial surplus in four seasons.

While the organisation "radically revised downward" its ideas over Brazil’s contribution, warning that the country’s production problems stemming from low rates of cane replanting would extend into 2012, it forecast a rise in output from India and from Europe’s beet sugar growers.

Indeed, beet sugar will, against the long-running trend, increase its share of total supplies of the sweetener to 21.4%, from less than 20% in 2010-11. In the 1970s, the figure averaged 40%.

Price prospects

Nonetheless, the ISO said it "does not believe the first season of a significant statistical surplus" after long-running tightness "will bring considerable bearish pressure on sugar market values".

"Major downward price corrections would be a surprise."

The depleted level of world sugar inventories meant that, as a proportion of use, they would still only end the season at about 36%.

This figure is "as low as in the deficit season of 2008-09", which ushered in the recent run of high prices – culminating in a 30-year high of 36.08 cents a pound reached in New York’s futures market in February.

Chinese needs

For China, where "two years of massive drawdowns have left stocks depleted", a programme of inventory rebuilding was already picking up pace, with July imports of 645,000 tonnes likely to have been repeated last month.

China’s imports are expected to reach 2.75m tonnes in 2011-12, up from and 2.1m tonnes in the current season and 1.84m tonnes in 2009-10.

Further ahead, India, the second-ranked sugar producer, will provide a buffer against falling prices, with its growers likely to show their historic readiness to switch crops should values fall too far.

"Should world prices fall over the coming months, it is very likely that Indian production post-2012 will suffer as a result and the country may enter the downward phase of its sugar production cycle," the ISO said.–3551.html

Avoid VAT charges when selling wool to Ireland


NFU Cymru is advising sheep farmers to check for tax implications when selling wool to Irish merchants.

It has emerged that livestock keepers may be liable to a VAT charge on a sale unless it can be proved that the wool has left the UK within three months of being sold.

HM Revenue and Customs says farmers must ensure that they have both the correct documentation and, more importantly, know whether the wool is actually dispatched to Ireland rather than used within the UK.

If it does not leave the UK at all farmers must charge and account for VAT on the sale as it is a solely domestic UK transaction, but if the wool is shipped to Ireland within three months the sale is zero rated for VAT.

“By taking a few simple steps farmers can avoid hassle and potential fines, including interest payments later on,” says NFU Cymru president, Ed Bailey.

“They should obtain the merchant’s Irish VAT number and quote this on the VAT invoice raised for the wool supplied. They should also keep copies of any correspondence that shows that the wool has left the UK within three months of it being sold.”

He said the union, however, was fully committed to encouraging farmers to support the British Wool Marketing Board.

“Wool sold outside of the board auction system at lower prices simply reduces the value of wool to all producers,” he added.

“There is demand for the product and as consumers are becoming more familiar with the environmental and the green agenda there is a huge potential for wool.

“Producers need to support the board so it can promote, market and sell at the best possible price.”