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newstfionline · 6 years

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Trump’s tariffs could cripple American farmers

Trevor Kincaid, Reuters, August 23, 2018

As the United States imposes an additional round of tariffs on $16 billion worth of Chinese imports, global trade relationships are changing in ways that could eventually leave American farmers out in the cold.

Farmers for Free Trade, a bipartisan campaign fighting President Donald Trump’s tariffs, has surveyed farmers throughout the United States about the trade war’s impacts. The common refrain has been that this group is worried about the long-term consequences.

While American farmers may be able to sustain their businesses in the near term, they are scared that markets where they have worked tirelessly to build relationships are now being won over by Brazil, Canada, Argentina, or Russia--among other competitors. No aid package will bring back those markets. And even if the trade war ended tomorrow, the damage to important and lucrative relationships with buyers has been done.

Farmers, of course, aren’t the only group that will be affected by any trade war. But their plight is important to understand because they were early targets of punitive tariffs, and those impacts are now being felt in associated industries.

Trump too often oversimplifies the complexities of policy issues to the detriment of those who elected him. Today, global trade is about more than tariffs. It includes a complex, interconnected network of suppliers, regulators, inspectors, shipping routes, and value chains. It’s built on relationships, cost, and reliability. Most importantly, competition is fierce and growing. Additionally, while tariffs can be turned on and off quickly, building--or reclaiming--trade relationships can take decades. That is what’s at stake.

The turbulence and uncertainty caused by Trump’s trade war has created a geo-economic feeding frenzy. U.S. competitors from Argentina to Ukraine are aggressively working to eat into markets once dominated by American farmers.

Brazilian soy farmers have seen opportunity--and fortunes--in the pains of their American counterparts. Farmers in Brazil’s countryside are swapping crops like sugar cane for soy, hoping to cash in and put Brazilian soy on Chinese dinner tables. And this bet is already paying big dividends. Brazilian soybean exports to China rose to nearly 36 million tons in the first half of 2018, up 6 percent from a year ago, according to Reuters. In July alone, they surged 46 percent from the same month a year earlier.

In just two years, farmland used to grow soy exploded by 5 million acres in Brazil. Trump’s trade war is literally changing the global trade landscape--a trend will only be exacerbated when new tariffs go into effect on Thursday.

And Brazilian farmers aren’t the only competitors reaping the rewards.

Tensions between the United States and Mexico are pushing Mexican wheat buyers to find new sourcing. Argentine, Russian, and Ukrainian wheat growers, who are able to offer cheaper prices, are stepping in to fill the void and are selling wheat to Mexico flour millers to be used in everything from bread to tortillas. Russia surpassed the United States as the world’s leading wheat exporter in 2016 and has only distanced itself from the competition since.

Meanwhile, U.S. wheat exports globally have plummeted by 21 percent in just the first half of 2018.

The anxiety stemming from Trump’s multifront trade war is weighing down exports as well as future business opportunities. The uncertainty has forced delegations from China, India, Italy and Spain to cancel meetings with American farmers that are organized annually to place orders and develop relationships.

American farmers are a tough bunch who are willing to sacrifice and know how to overcome challenges. They have persisted through climate change, market fluctuations, floods and droughts; the last thing they need is to contend with hardship and stress because of bad policy from their own government.

Less demand for U.S. exports means soy, wheat, corn, and other crops sit in storage rather than being loaded on train cars, trucks, and eventually ships. The decrease in volume will transform supply chains that have been built and refined to maximize efficiency between the United States and Asian buyers.

Bulk shipping managers are already repositioning fleets to take advantage of emerging trade routes and expanding opportunities.

The decline in exports and squeeze on farm budgets will eventually make it difficult for farmers to cover bills, mortgages, loans, and planting costs for next year’s crop. That will extend the ripple effect to financial institutions, real estate, and future crop production.

Every week that passes closes more doors to U.S. farmers and unlocks new opportunities for their competitors. It’s unclear whether what has already been lost will ever return.

Trevor Kincaid was the Deputy Assistant U.S. Trade Representative for Public Affairs in the Obama administration and is a member of the Washington International Trade Association. He previously served in the U.S. Senate and House of Representatives.

#Trump tariffs #American farmers #farm exports

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swarajya7793 · 3 years

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Significant COVID-19 Impact on Sugar | Food and Beverage Industry | Data Bridge Market Research

COVID-19 Impact on Sugar in the Food and Beverage Industry

The sugar industry plays an important role in maintaining the economy of the country is also facing several challenges in the course of its journey. Recently, the threat which is posed by the novel coronavirus (COVID-19) is impacting sugar sector stakeholders badly. Due to this, the integrated industries all over the world are also facing multiple challenges such as production, transportation among others.

The entire value chain in the sugar sector from sugarcane, sugar, molasses, ethanol, and their subsequent marketing and export has been adversely affected due to the pandemic.

The industry is also facing reduced off-take from associated industries such as beverage and other FMCG companies due to the lockdown. The industries are shut to control the spread of coronavirus, due to which the demand for the sugar declined, and hence sugar sector is declining in generating revenue.

Mainly two of the country which produces sugar and dominating worldwide and also helping socio-economic development of the nation are now facing bigger challenges in this industry. They are Brazil and India in which India accounts for around 15.0 to 25% of the sugar and sugarcane production all over the world. Now, with the pandemic and lockdown, the consumption has fallen as people are made to stay at home and also shutdown in foodservice sectors such as bakeries, hotels, restaurants, and cafes reducing the demand for the sugar.

For instance, according to an article published by Sugar Asia magazine, it is expected that the consumption of sugar could fall to 25 million tons as against 26 million tons which were expected previously.

They have also said that it was found that in the first six months of sugar season from October 2019–March 2020 sugar production has decreased by 22.0% from the last year.

Table 1: Decreasing growth in the sugar production in first six months of sugar season.

Source: Sugar Asia Magazine

The operations for the sugar production were running up to the 3rd month of 2020. Further, it has been noticed that the production started getting affected so far in April on account of labor shortages due to COVID-19 breakout. Due to lack in value and supply chain, some other inputs which are need in sugar products such as Sulphur, lime, bags & other packing material were also not available or were less available due to disruptions in transportation.

Apart from production, the demand from the associated industries has also got reduced. The associated industries are a bakery, confectionery, and beverages among others. For instance, sugar supplies to the beverages manufacturers are greatly decreased as they have put off operations in bottling plants during the summertime when demand for such beverages is high.

Along with these, the food sector such as retail, hotel, and catering which are also larger consumers of sugar has reduced the demand of sugar by national lockdown as all hotels, restaurants, bars, sweetmeat shops, and other miscellaneous food establishments have been closed.

The international sugar prices have fallen by approximately 23.0% between January and April in the year 2020 as large supplier-nations such as Brazil, are switching from ethanol to sugar due to slack global oil demand and low crude oil prices. Thus, exports from India are likely to remain flattish compared with a 25-30% growth expected earlier. For instance, the drop in the export price of white sugar from USD 425 per tonne in February 2020 to USD 355/tonne at present time has resulted in declination in the market value of the sugar industry

Figure: Sugar price decreased from previous year (in USD Lbs.)

Source: Tradingeconomics

FAO has also given its estimates that global sugar prices fallen by 19.1% in March 2020 from February 2020 due to lower demand in the coronavirus outbreak.

In the crisis, sugar industry is facing multiple challenges from the production to trade due to which market value of industry is getting impacted in recent time. But in future, once the vaccine or medicine is made available in market against coronavirus and the spread of COVID-19 is under control, sugar industry will takes its position as of previous years. Again the demand will increase from food industries and food service sector and there will be increase in the value of the sugar market in future.

SUGAR MANUFACTURERS: PERSPECTIVE & INITIATIVES

The outbreak of COVID-19 has brought world to a halt where each and every industry has got an impact of it. This crisis has brought to an unexpected situation through which everyone is going on. With such unscrupulous situation, everyone is trying to get over of it. In all, one of the cannabis related product industry which has fallen badly due to Covid-19 in start of 2020. But rising support from several companies as well as governments are helping the industry to rebuild the position again in market.

The halt in the production of the sugar have led various food and beverages manufacturers to reduce and halt their production due to the shortage of sugar. For instance,

"Will temporarily cease operations due to a lack of raw materials." Production of sugar-based beverages has halted but non-sugar drinks like Diet Coke would continue.”

- Company. Coca-Cola

“Sugar companies in Brazil may face losses if prices continue to trade at 10 cents to 11 cents a pound.”

- Joamir Alves, CEO Grupo Virgolino de Oliveira SA

The government has taken initiatives to reduce the sugar consumption as it their consumption in soft drinks is one of the major causes of obesity, for instance,

“The Soft Drinks Industry Levy has been successful in reducing sugar intakes sugar via reformulation, and in raising much needed revenue for children’s services,” it said. “The current sugar levy sugar thresholds should be reduced, the rates increased, and it should be immediately applied to a calorie threshold in sugar sweetened milk and milk-alternative drinks.”

- Katharine Jenner - campaign director of Action on Sugar and Action

"The food industry is feeding us heavily discounted and promoted processed food and drink, full of salt, fat and sugar, giving us little feeling of satiation, which greatly increases our calorie intake. Millions of families face poverty sugar and food insecurity and are unable to access a nutritionally adequate diet.”

- Graham MacGregor from Queen Mary University on Sugar and Action

High demand of the ethanol due to their utilization in sanitizer production and high demand of the sanitizers have led government to push up the production of sugar.

For instance,

“The situation at present is such that even a mandatory 5 per cent blending of ethanol with petrol, as committed by the government to protect the environment three years ago, would be difficult to meet as a result of a short supply of sugarcane. With an expected fall in the cane output, the 20 per cent ethanol blending, which the government is planning to make mandatory, is unlikely to be practical,”

- Deepak Desai, the chief consultant of ethanolindia.net

“India should implement a more “ambitious” biofuel program that will help its sugar mills to increase production of ethanol and “balance the world sugar market”

- Brazilian Sugarcane Industry Association/ UNICA.

“Retailers are seeing a surge in demand while foodservice customers and themselves with more product than they need,” he said. “We are doing everything possible to connect customers together to move the extra product to where it’s needed most, while adapting our manufacturing plants to create a more agile supply system.”

- Mike Wagner, managing director of Cargill North America

“China represents more than 70% of the stevia leaves grown globally and is, therefore, a key supply base for stevia sweeteners, “Sweet Green Fields was among the rest factories approved by the Chinese government to re-open post-COVID-19 and is currently producing and supplying customers.”

- Shasha Yu, marketing director, Sweet Green Fields

“People tend to consider aspartame as a commodity but [we] turned it into a new ingredient that traveled by plane,” The air shipments are extreme – it was really at the very start of the crisis when people woke up and found out they would be out of product – but it shows you how crucial the role of aspartame in food is. I turned it into a joke, saying that our aspartame is traveling VIP.”

- Youssef Hamayet Elmili, global sales director at HSWT

Source: Company Websites, Magazines, Nutrition Journals, Portals

CONCLUSION

The threat posed by the growing pandemic novel coronavirus (COVID-19), has been the most recent once and it is impacting sugar industry stakeholders and its integrated industries, all over the world. Brazil and India are the top producers of sugar across the globe, each producing nearly 25% and 15% of global sugar and sugarcane, respectively. The development of COVID-19 will have a direct effect on the production and consumption of the sugar industry in the short term.

The ongoing COVID-19 pandemic has been putting pressure on the sugar consumption patterns, complemented with a reduced off-take from beverage and other FMCG companies amid the lockdown across multiple countries. As the beverage and sweetener sector is the bulk consumer of sugar, it is likely to adversely affect the consumption owing to the precautionary measures of avoiding social gatherings.

These developments and a drop in crude oil prices have caused a ripple effect on international sugar prices. The globe has witnessed a sharp drop in sugar price, wherein in March 2020, the global prices fell steeply by 22%.

Owing to the petroleum crisis, Brazil has planned to increase their sugar production, to offset the decline in sugarcane consumption from the ethanol industry. This is further expected to affect the prices of sugar in the international market. Further, due to COVID-19, temporary disruptions in the supply chain have been experienced by the millers.

Owing to the pandemic, there have been major shifts in consumer preferences, with the increasing awareness of a healthy lifestyle. Consumers have started substituting conventional ingredients with healthier alternatives. This would also affect the sugar industry. With “no-added-sugar” and “high protein, low carbs” diet trend among consumers, the demand for sugar was already offset in the past, while this trend is expected to be boosted in the coming years. Hence the future of the sugar industry is expected to witness steady demand, majorly from the beverage industry in the coming years, even after the COVID-19 phase.

#Sugar Market #Sugar Market Analysis #Sugar Market Analysis in Developed Countries #Sugar Market by Application #Sugar Market by Type #Sugar Market Development #Sugar Market Forcast #Sugar Market Future Innovation #Food and Beverage Industry

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allthebrazilianpolitics · 3 years

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Boom in sugar-based biofuel leaves Brazil's workers with a bitter taste

[Image description: Pedro, a sugarcane worker, looks to saints for protection before he goest to work in Atalaia, Brazil, September 26, 2021.]

P edro was just seven when he started work on a sugarcane farm with his father after refusing to go to school - little knowing what this small act of rebellion would cost him.

For nearly four decades, Pedro has cut sugarcane under the hot sun in Brazil, one of the world's top producers of ethanol - a key material in the biofuel that powers vehicles worldwide and is seen as a key part of the global switch to cleaner energy.

It is backbreaking work.

Pedro's base pay is less than $7 a day - a monthly wage that falls way below Brazil's statutory minimum of about R$1,045 ($192) - and he said he has seen co-workers collapse and die in the fields from heat and exhaustion.

Every day before going to work, he prays that he will be spared.

"It's not a good profession," said Pedro, who asked that his real name be withheld for fear of reprisals for speaking out.

"I want to stop, but I don't know how to read. I'm old - I am 46, I'll be 47 in April. I don't have much hope, but if one day something better comes up, it would be very good," he told the Thomson Reuters Foundation at his home in northeast Brazil.

Brazil is the world's second-largest producer of ethanol, a biofuel made from sugarcane, corn and other crops that can be mixed with gasoline to reduce carbon emissions from vehicles powered by fossil fuels.

Much of the gasoline in the United States now contains ethanol, and some climate experts see the industry as a key element of the world's transition from a carbon-based economy to a greener one.

Yet ethanol has a human cost.

Nearly 8,000 people have been found working in slave-like conditions on sugar plantations in Brazil, which produces most of its ethanol from sugarcane, since the government began conducting rescue operations in 1995.

An investigation by the Thomson Reuters Foundation found the very workers who are contributing to the fight against climate change by harvesting sugarcane are also becoming its victims, as rising temperatures make the work increasingly hazardous.

Most workers the Thomson Reuters Foundation interviewed said they knew of colleagues who had died while working. One expert who studies the issue said the combination of heat and overwork could bring on heart attacks in those with a predisposition.

Yet exclusively obtained documents show companies producing ethanol in Brazil remained on lists of suppliers cleared to export to Europe and the United States long after Brazilian authorities had named them in labor abuse cases.

#brazil #brazilian politics #politics #environmental justice #environmentalism #workers rights #farming #mod nise da silveira

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allygreathouse · 4 years

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Day 1 Saturday May 5Depart the U.S. for an overnight flight to Sao Paulo.

Day 2 Sunday May 6Arrival and transfer to lunch. Check into the hotel before enjoying a city tour of Sao Paulo. Visit the Ibirapuera park, art museum, central market farmers market (group lunch here) and various neighborhoods that make up this 3rd largest city by population in the world, with over 21 million citizens. Brief discussion on history, economic and political climate of this region.

Day 3 Monday May 7In the morning, visit with the Farmer Federation of Sao Paulo state to discuss farming practices in sustainability and touch on some Amazonian topics. Also, meet with a UNICA (Ethanol and Sugar Industry Association of Brazil) to discuss a number of topics related to fuel consumption, pricing and consumer demand. Brazil is a pioneer in the ethanol industry and has substituted a large amount of gas powered cars to flex-fuel or neat ethanol vehicles.

Day 4 Tuesday May 8Today, leave the big city for Campinas and a visit with the University of Sao Paulo, Luiz de Queiroz College of Agriculture. Possible community service project with students or other interaction. In the afternoon, fly to Curitiba on a non-stop 1 hour flight. Azul Airlines flight#4269, 6:05pm - 7:05pm Overnight in Curitiba

Day 5 Wednesday May 9In the morning, take a train through the Atlantic Rainforest from Curitiba to Morretes for a first hand feel of the geography and steep mountains in this region of Brazil. Upon arrival, travel by bus to the Port of Paranaguá, founded in 1872. It is the largest bulk port of Latin America and one of the world’s most important sea trade centers. Some of the most important goods to cross the port are: soybean, crumb, corn, salt, sugar, fertilizers, containers, frozen goods, petroleum derived products, alcohol and vehicles. Finish the day traveling back to Curitiba by bus and stopping at a banana farm. Overnight Curitiba

Day 6 Thursday May 10Today, travel to Ponta Grossa and visit a Cargill facility. Here, they crush soybeans and have an animal nutrition wing. Following lunch, a visit to the Experimental Extension of IAPAR (Institute for Agronomy) to learn about some of the research they’re doing on the environment and improving production methods for farmers. The institute has more than 700 employees and over 100 researchers. In the evening, enjoy a pizza dinner at your guide’s home while visiting with local students and farmers. Overnight Ponta Grossa

Day 7 Friday May 11Possible farm visit in the morning. Today, begin your 200-mile drive north to Londrina. On the way, visit Guartela Canyon, which is the largest canyon in Brazil at nearly 1,500 feet deep and 20 miles long. Guided hike and talk on the flora/fauna and history of this area. Overnight Londrina

Day8 Saturday May 12In the morning, travel to a coffee farm to learn about the production and harvesting methods of coffee. Brazil is the largest supplier of coffee worldwide with ⅓ of all beans coming from Brazil. In the evening, possible meeting with students w/ BBQ dinner and producers fair. Overnight Londrina

Day 9 Sunday May 13 Londrina! Enjoy the park on bike, samba music, and weekend with some friends of the guide and exchange students.

Day 10 Monday May 14Tour EMBRAPA in Londrina. EMBRAPA is the Brazilian Agricultural Research Corporation focuses on developing technologies to improving all aspects of agriculture and livestock. The focus at this facility is on the development of soybean production. You will also visit a grain farm enroute to Campo Mourao. Overnight Campo Mourao

Day 11 Tuesday May 15Today, you will drive to Santa Teresa Oeste and visit a IAPAR center focused on environmental and agroecology. In the afternoon, visit a dairy farm/biogas. Continue travel to Foz do Iguazu this day. Overnight Foz do Iguazu

Day 12 Wednesday May 16Morning departure to Iguazu Falls which is one of the largest in the world. It’s comprised of about 275 waterfalls and spans an area of 2.7 kilometers. The falls span both Brazil and Argentina. On this day, you will visit the Brazil side of the breathtaking falls and the amazing bird park. Finish the day with some souvenir shopping at one of the outlets.

Day 13 Thursday May 17Today, visit the Argentine side of the Falls which has an expanded area of decks and platforms, a different perspective than the Brazilian side of the Falls. Following lunch, plan to get wet on a thrilling boat ride as you get close the Falls and listen to the sheer power of the water spilling over. Finish the evening with a group dinner and culturaldance show. Overnight Foz do Iguazu

Day 14 Friday May 18Visit Itaipu Dam which is located on the border between Brazil and Paraguay. It provides electric for both countries and was once the largest dam in the world. After lunch, check-in to the airport and say goodbye to your guide as you fly back to Sao Paulo for your return flight home. GOL Airlines Flight#1171 Depart 1:35pm arrives 3:20pm

Day 15 Saturday May 19Arrival back in the U.S.

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novanaelites-blog · 4 years

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groupagtrading · 5 years

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ericfruits · 6 years

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Trade war has given agricultural merchants a boost

ON DECEMBER 10TH Bunge, an American agribusiness giant, announced plans to replace both its chairman and its CEO. The move may seem ungrateful: the company’s profits surpassed analysts’ expectations in the most recent quarter, marking a turn after a string of bad years. But industry insiders were unsurprised. Despite cost-cutting and divestments, Bunge’s share price is 28% below its February peak, even after a 3% jump when the reshuffle became public. Its travails are a sign of changing times for soft-commodity traders.

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For decades ADM, Bunge, Cargill and Louis Dreyfus—the ABCDs of agribusiness—were unavoidable middlemen. From corn and cocoa to soya and sugar, they could best gauge supply and demand, thanks to superior intelligence on stocks and harvests. Their storage facilities placed them well to ride out price swings. State buyers and multinationals relied on their global footprint to source staples. Their networks of ports, ships and trucks meant they picked up profits all along the way.

But five years ago their grip started to loosen. In 2013 the quartet posted $351bn in combined sales, equivalent to over a quarter of the world’s annual food-import bill. By 2017 that had shrunk to $260bn. At most companies profits also crashed, pummelling share prices. And though they together retain 235,000 staff, many traders have left.

Stable, low crop prices, induced by a persistent global glut, were squeezing margins. But the disintermediation owed more to structural forces. Phone apps could provide farmers with real-time data on prices in all markets. Farms became bigger, and invested in storage. “Today you don’t need all these in-between halfway houses,” says Detlef Schoen, a former head of Cargill’s European grain business. The traders’ decline seemed unstoppable.

Until this summer. In June, after President Donald Trump slapped tariffs on $50bn-worth of Chinese goods, Beijing retaliated by targeting soyabeans, America’s biggest farm export. That hammered American prices; Latin American substitutes soared. Brazilian soya, on par with American soya in May, opened up a wide lead before falling back as Brazil’s export season drew to a close and hopes for a truce in the trade war briefly rose (see chart).

American farmers were hit hard. But trading became profitable again. All four ABCDs have hinted at strong earnings for the period since June. In their high-volume, low-margin business, says Vincent Andrews of Morgan Stanley, a bank, agricultural traders shovel “pennies, nickels or dimes”. Until relatively recently, pennies were all they could pick up; now they are earning nickels. Volatility brings opportunities for arbitrage; depressed American prices mean bigger margins on processing soyabeans into animal feed.

Dimes may soon be on offer. “America must find new clients, China new suppliers. Traders have a new raison d’être,” says Jean-François Lambert, a consultant.

But the good times are unlikely to last. Trade shifts will outlast the war. And China will want to diversify away from America, says Heather Jones of Vertical Group, an investment firm. Disintermediation is likely to resume once the market settles. Digital market-places such as FarmLead, which covers 12% of North America’s grain market, mean farmers can shop around for the best price. “There’s no more loyalty in this business,” buyers tell Alain Goubau, the startup’s operations chief.

And the established players face another problem: new competition for supply. Glencore Agriculture, a trader backed by Glencore, a metals and mining firm, and by two Canadian pension funds, has been quicker to move into the Black Sea region, which now exports more wheat than America and Canada combined. Olam, a 30-year-old firm owned by Singapore’s state fund, has carved out a lucrative niche in Asia and Africa, in spices and nuts.

Eat or be eaten

Meanwhile China is advancing in Latin America. Since 2014 it has spent billions building up COFCO, a state-owned food processor, into an international trading platform. Though marred by integration problems, its acquisitions of parts of Noble Group and Nidera, two traders with South American presence, have made it a top-five exporter of Brazilian produce. It has invested in elevators, ports and processing plants, including a 60,000-tonne silo complex in Mato Grosso, Brazil’s top soya-growing state. Valmor Schaffer, COFCO International’s Brazil chief, says China buys 70% of the produce the company exports from Brazil, up from some 30% three years ago. Tariffs are a boon to Latin American farmers, he argues. China can test the quality of Brazil’s late-year shipments, and likes what it gets. COFCO is not interested in sharing the spoils. Mr Schaffer says it would not like joint ventures with other traders unless it holds a majority stake.

The ABCDs remain the only truly global firms. But regional competition is adding to their main problem: too many companies are doing the same thing, says Sönke Lorenz of BCG, a consultancy. Tariffs or not, there are only two ways they can restore stable profits. They can diversify into food-manufacturing: Cargill, the most successful, derives two-thirds of earnings from its animal feed and protein business. Or they can consolidate, though their distinct cultures and ownership structures have till now made this hard.

Could the shake-up at Bunge create an opening? Saddled with bad investments in sugar production, it started a “strategy review” in October. Yet there have been two failed takeover approaches in the past year, suggesting it remains too pricey for rivals to swallow whole.

Antitrust issues also loom large. “This company should already have been acquired five times. But no one is doing it,” says a former employee. Rivals may be waiting for Bunge to become a better bargain before slicing it up.

This article appeared in the Finance and economics section of the print edition under the headline "Zero-sum grain"

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kristinnicasio-blog · 7 years

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https://www.icumsa45.com.br/ Icumsa 45 sugar manufacturers in Brazil

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businessliveme · 5 years

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The World Is Running Short of Sugar and Top Buyer Wants More

(Bloomberg) — Just as the world’s top sugar traders forecast a global shortage of the commodity, No. 1 raw-sugar importer Indonesia says it wants a record amount of the sweet stuff.

The Southeast Asian nation said it aims to import about 1.4 million tons of raw sugar, or 1.33 million tons of the refined variety, for household use this year and in early 2021. That’s a more than 11-fold increase on last year. Meanwhile, domestic output is expected to sink while local demand increases.

The imports for households are on top of 3.25 million tons in forecast purchases this year to supply industrial users. The U.S. Department of Agriculture estimates the country will buy 4.5 million tons of raw sugar in 2019/20.

“Ideally we must have at least 1.3 million tons of stockpiles in early 2021,” Yadi Yusriyadi, senior adviser at the Indonesian Sugar Association, told reporters in Jakarta on Wednesday. “If there’s no additional supply through imports while demand keeps increasing, prices will definitely continue to rise.”

Price Rally

Global sugar prices have surged about 12% this year for the best start to a year in a decade as a drought cut shipments from Thailand, the world’s No. 2 exporter. The Thai squeeze surprised traders at a time when the European Union was already producing less, Brazil had turned more of its cane crop into ethanol and freezing weather wrecked crops in North America.

London-based commodities trader ED&F Man Holdings Ltd. raised its forecast for a world sugar deficit this season by about 10% to 7.7 million metric tons after a surplus a year earlier. The market, which was previously grappling with an oversupply from India, now needs the sugar, said LMC International.

Food consumption in Southeast Asia’s largest economy has surged in the past decade as growing affluence changes diets and lifestyles. Rising demand from Indonesia may benefit top sugar producers India and Brazil, both of which are seeking to fill the gap in supply from Thailand.

The Indonesian sugar association represents 20 mills, mostly state-owned, that crush domestic cane or make additional imports, mostly from Thailand, to meet household consumption. Industrial users are supplied by another group of 11 refiners that process imported raw sugar.

Thai Sugar

The country’s sugar refiners will likely buy most of their raw sugar from Thailand in the first half, while also eyeing supply from Australia and India, said Chairman of Indonesia Sugar Refiners Association Bernardi Dharmawan.

The three countries are favorable suppliers because of their close proximity to Indonesia and as the sweeteners carry the same import duty of 5%, Dharmawan said in a text message. The government has allowed eight refiners to import 1.1 million tons of raw sugar in the first half.

The Indian government is in advanced discussions for Indonesia to lower the color specification that will allow supply from the South Asian country, according to the Indian Sugar Mills Association.

Indonesia is also buying sugar from Brazil, according to world’s top trader Alvean, which is set to ship 60,000 tons of raw sugar this week. Dharmawan of the refiners association said he has yet to get details of Brazilian imports.

The post The World Is Running Short of Sugar and Top Buyer Wants More appeared first on Businessliveme.com.

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the respective colonial (or semi-colonial) experiences of the two nations during the 19th century. However our analysis differs from the “colonialism-institutions hypothesis” in several ways. Colonialism in Brazil and India lead to two divergent processes: On the one hand, regressive political and economic institutions (slavery, regressive land tenure systems, lopsided distribution of political power etc.) emerged. On the other hand, colonial exploitation led to another set of consequences: disenfranchisement amongst the masses and sections of the elite (especially the industrial elite) who sought to break from the international division of labour that had restricted their economies into exporters of primary commodities. One therefore finds that after independence, though a number of colonial institutions remained, a number of others were dismantled.

The emergence of a proactive state and the initiation of import substituting industrialization were the biggest institutional changes that were introduced in the 20th century. However, the specific differences in historical experiences led these countries to adopt different sets of policies even within a state lead ISI framework. In Brazil, the state and domestic class interests aligned themselves in such a way so as to provide space for FDI in the industrialization process. In contrast, in India the post-colonial society established institutions that restricted FDI in the economy until the neo-liberal era. The basic scheme of our argument can thus be explained as follows:

19th century historical factors → Institutional persistence and institutional rupture → role of FDI in the economy → Industrial growth

In the first two sections of this article we shall briefly review the function of foreign investments both prior to and during the process of import substituting industrialization (ISI) in each country. The following section we analyze the changing role of FDI in the neo-liberal era, when ISI was abandoned. Following this, we then analyze the contemporary role of FDI in the respective economies, and then examine the advantages and disadvantages the different policies towards foreign capital have had on the development process of each country.

FDI IN HISTORICAL PERSPECTIVE

Brazil

In the early years after independence (from 1822 to the 1850s) foreign investments (mostly of British origin) were mainly concentrated in finance and trade. The production of export products (coffee and sugar) was dominated by local residents, while the shipping and the financing of trade was in the hands of foreigners. In the second half of the 19th century the Brazilian government encouraged foreign capital to build the country’s infrastructure – railroads, ports, and urban public utilities. Much of these investments were designed to better integrate Brazil into the world’s trading network as a supplier of primary goods. In 1880 the total stock of foreign investments were estimated at US$ 190 million; this expanded to US$ 1.9 billion by 1914 and to US$ 2.6 billion by 1930. Prior to 1930 Britain was the dominant foreign investor; it still accounted for 50% of foreign investment in that year, though the United States share was rapidly increasing, already accounting for 25% of total foreign investments.

Although foreign investments contributed resources and technology to Brazil in the years prio

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