About Czarnikow Czarnikow has been in the sugar business since 1861 Czarnikow is the leading professional services company in the sugar market Czarnikow has a ‘first hand’ presence in all major sugar markets of the world and employs over 100 professional staff …The Premier Provider of Sugar Market Services…
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About Czarnikow
Czarnikow has been in the sugar business since 1861
Czarnikow is the leading professional services company in the sugar market
Czarnikow has a ‘first hand’presence in all major sugar markets of the world and employs over 100 professional staff
…The Premier Provider of Sugar Market Services…
A Global Office Network
Head OfficeHead OfficeLondonLondon
MoscowMoscow
NairobiNairobi
DubaiDubai Hong KongHong Kong
SingaporeSingapore
RioRio
New YorkNew York
MexicoMexico
0
5
10
15
20
25
30
35
40
45
48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02
c per lb
Cuban Missile Crisis
Oil Price Shock
Oil Price Shock
Last Post-BoomTrough
SuezCrisis
KoreanWar
Old Range
The New Environment
New York Spot Prices
50
55
60
04
Historical Price Spikes
World Production and Trade
Domestic Use
World Trade
RawsWhites Preferential
Consumption ≈ 140m tonnes Cross-border trade ≈ 40m tonnes
No.11 Sugar Price
Oct
02
Nov
02
Dec
02
Jan
03
Feb
03
Mar
03
Apr
03
May
03
Jun
03
Jul 0
3
Aug
03
Sep
03
Oct
03
Nov
03
Dec
03
Jan
04
Feb
04
Mar
04
Apr
04
May
04
Jun
04
Jul 0
4
Aug
04
Sep
04
Oct
04
Nov
04
Dec
04
Jan
05
Feb
05
Mar
05
Apr
05
May
05
Jun
05
5.00
6.00
7.00
8.00
9.00
10.00
11.00Cents per lb
Recent 6 month 8.00c / 9.50c price range
March 2003 contract price spike.
India swings from exporter to importer
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
5.00
6.00
7.00
8.00
9.00
10.00
11.00lots c per lb
Oct
02
Nov
02
Dec
02
Jan
03
Feb
03
Mar
03
Apr
03
May
03
Jun
03
Jul 0
3
Aug
03
Sep
03
Oct
03
Nov
03
Dec
03
Jan
04
Feb
04
Mar
04
Apr
04
May
04
Jun
04
Jul 0
4
Aug
04
Sep
04
Oct
04
Nov
04
Dec
04
Jan
05
Feb
05
Mar
05
Apr
05
May
05
Jun
05
Speculators vs. No.11 Sugar Price
Speculative Open Interest1st Delivery New York No.11
0
10,000
20,000
30,000
40,000
50,000
Oct
02
Nov
02
Dec
02
Jan
03
Feb
03
Mar
03
Apr
03
May
03
Jun
03
Jul 0
3
Aug
03
Sep
03
Oct
03
Nov
03
Dec
03
Jan
04
Feb
04
Mar
04
Apr
04
May
04
Jun
04
Jul 0
4
Aug
04
Sep
04
Oct
04
Nov
04
Dec
04
Jan
05
Feb
05
Mar
05
Apr
05
May
05
Jun
05
US$ per day
5.00
6.00
7.00
8.00
9.00
10.00
11.00Cents per lb
Freight Rates vs. No.11 Sugar PriceTrans Pacific round voyage (Route 2) Monthly Average No.11 First Futures
Cost and Freight price
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
5.00
6.00
7.00
8.00
9.00
10.00
11.00lots c per lb
Oct
02
Nov
02
Dec
02
Jan
03
Feb
03
Mar
03
Apr
03
May
03
Jun
03
Jul 0
3
Aug
03
Sep
03
Oct
03
Nov
03
Dec
03
Jan
04
Feb
04
Mar
04
Apr
04
May
04
Jun
04
Jul 0
4
Aug
04
Sep
04
Oct
04
Nov
04
Dec
04
Jan
05
Feb
05
Mar
05
Apr
05
May
05
Jun
05
Speculators vs. No.11 Sugar Price
Speculative Open Interest1st Delivery New York No.11
Trade Flows- Raw & White SugarJuly 2004 Outlook
-1250
-1000
-750
-500
-250
0
250
500
750
1000
1250
1500
1750
-1500
1st Q'04 2nd Q'04 3rd Q'04 4th Q'04 1st Q'05 2nd Q'05 3rd Q'05
White Raw
-1250
-1000
-750
-500
-250
0
250
500
750
1000
1250
1500
1750
-1500
1st Q'05 2nd Q'05 3rd Q'05 4th Q'05 1st Q'06 2nd Q'06 3rd Q'06
Trade Flows- Raw & White SugarJune 2005 Outlook
White Raw
Small raw sugar deficit despite large Brazilian export programme (3.8m tonnes during Q3)
Trade Flows- Raw & White SugarJune 2005 Outlook
2nd Q'05 3rd Q'05
White Raw
Trade Flows- Raw & White SugarJune 2005 Outlook
4th Q'05 1st Q'06 2nd Q'06 3rd Q'06
White Raw
Market back to 1m tonne trade surplus during 2005/06
Trade Flows- Raw & White SugarJune 2005 Outlook
2nd Q'06
A potential raw sugar deficit during the 2nd quarter could make the Trade interested in the March 2006 futures contract
White Raw
Trade Flows- Raw & White SugarJune 2005 Outlook
-1250
-1000
-750
-500
-250
0
250
500
750
1000
1250
1500
1750
-1500
1st Q'05 2nd Q'05 3rd Q'05 4th Q'05 1st Q'06 2nd Q'06 3rd Q'06
White Raw
World Stock Change
2
4
6
8
10
12
14
16
18
| 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 00| 01| 02| 03| 04-8
-6
-4
-2
0
2
4
6
8
10US c/lb Million tonnes
No.11 Raw Spot Price
Stock Change
| 05
Early indications are that the statistics will be in balance during 2005/06
India
Indian Swing Cycle
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Million Tonnes Production/Consumption Difference
Consumption
Marginally higher production has reduced need for white sugar imports
Indian Imports 2005
Raw Sugar Imports: 1.7m tonnes
White Sugar Imports: now unlikely
Indian Imports 2006 ?
Raw Sugar Imports: 1.0 m tonnes
Small White Sugar Exports (ALS)
China
0
2
4
6
8
10
12
14
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
000'stonnes
Chinese Consumption
New government regulations support Consumption growth.
0
2,000
4,000
6,000
8,000
10,000
12,000
Nov Dec Jan Feb Mar Apr May Jun
'000
mt
04/05 02/03 03/04
China Production Progress (cane & beet)
China Factory Sales
0
200
400
600
800
1,000
1,200
1,400
Nov Dec Jan Feb Mar Apr
'000
mt
2004/05 2003/04
20 m Production
2m Preferential
Imports
17m Consumption
5 m Exports
=
The EU Sugar Regime: a rough balance
Original Quota Cuts & Price
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
04/05 05/06 06/07 07/08 08/09
million tonnes
0`
100
200
300
400
500
600
700Euros per tonne
Proposed Quota CutProposed Price Cut
Revised Production Cuts & Price
04/05 05/06 06/07 07/08 08/090`
100
200
300
400
500
600
700Euros per tonne
Possible productionProposed Price Path
€730 buy out price
€625 buy out price
€520 buy out price
09/10
€420 buy out price2.4m tonne fall?
1.7m tonne fall?
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0million tonnes
Reference Price net of restructuring Amount
1.0m tonne fall?
EU Exports
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07
mtwv
Strong possibility of record exports in final year
WTO limit circa 1.3m tonnes
Main homes for EU Sugar
West Africa Imports circa 360k
tonnes
North Africa Imports circa 755k
tonnes
Far EastImports circa 1.75m
tonnes
Middle East Imports circa 1.16m
tonnes
Other EuropeImports circa
650k tonnes
Futures EU Exports?
Switzerland, Norway and Israel import roughly 1m tonnes of sugar from the EU
Brazil
(10)
(5)
0
5
10
15
20
25
30
35
40
45
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
US$ B
ln
Brazil Trade Balance
Real Chart
2.30
2.40
2.50
2.60
2.70
2.80
2.90
3.00
3.10
3.20
3.3020/0
5/2
004
03/0
6/2
004
17/0
6/2
004
01/0
7/2
004
15/0
7/2
004
29/0
7/2
004
12/0
8/2
004
26/0
8/2
004
09/0
9/2
004
23/0
9/2
004
07/1
0/2
004
21/1
0/2
004
04/1
1/2
004
18/1
1/2
004
02/1
2/2
004
16/1
2/2
004
30/1
2/2
004
13/0
1/2
005
27/0
1/2
005
10/0
2/2
005
24/0
2/2
005
10/0
3/2
005
24/0
3/2
005
07/0
4/2
005
21/0
4/2
005
05/0
5/2
005
19/0
5/2
005
Real/US$
Centre-South RegionOwn caneUS$1.00= R$2.93 5.77
0.62
0.110.76
0.36
0.48 0.14
0.47
0.38 3.32
1.18 4.49
0.77
0.50
PlantationsInvestments
Land Maint.. Cost of Capital
Harvesting Loading Cane Cost Ex-Mill
Tolling Freight to Port
Port Operations
Sugar CostFOB
Transport Sugar CostEx-Mill
Adm.
CS Region Sugar Production Cost
(US c/p Sep/2003)
Centre-South RegionOwn caneUS$1.00= R$2.93
PlantationsInvestments
Land Maint.. Cost of Capital
Harvesting Loading Cane Cost Ex-Mill
Tolling Freight to Port
Port Operations
Sugar CostFOB
Transport Sugar CostEx-Mill
Adm.
CS Region Sugar Production Cost
Current Values
0.50
1.08
5.131.21
3.910.51
0.65
0.130.46
0.39
0.90 0.10
0.77
6.71
Centre-South RegionOwn caneUS$1.00= R$2.40
0.50
1.32
6.261.48
4.780.62
0.80
0.150.57
0.47
1.10 0.12
0.94
8.08
PlantationsInvestments
Land Maint.. Cost of Capital
Harvesting Loading Cane Cost Ex-Mill
Tolling Freight to Port
Port Operations
Sugar CostFOB
Transport Sugar CostEx-Mill
Adm.
CS Region Sugar Production Cost
Current Values
Hydrous Alcohol
Anhydrous Alcohol Sugar Domestic
Sugar Exports
Brazil Cane Splits
Ethanol and Flex-Fuel Sales
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Jan-0
1
Apr-
01
Jul-
01
Oct
-01
Jan-0
2
Apr-
02
Jul-
02
Oct
-02
Jan-0
3
Apr-
03
Jul-
03
Oct
-03
Jan-0
4
Apr-
04
Jul-
04
Oct
-04
Jan-0
5
Apr-
05
units
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
units
Flexfuel Pure Ethanol
Gasoline 12 Month Flex-Fuel
Total Market Sales Trend
Brazilian Ethanol Exports 2004/05
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000U
.S.
India
Net
her
lands
Japan
Jam
aica
Nig
eria
Kor
ea
Cost
a R
ica
Can
ada
Chin
a
Mex
ico
Turk
ey
Arg
entina
Sw
eden
Sin
gapor
e
Bel
giu
m
El Sal
vador
Finla
nd
Ital
y
Car
ibea
n
Ghan
a
Spain
Ven
ezuel
a
U.K
.
Sou
th A
fric
a
Dom
inic
an R
ep.
Wes
t In
die
s
Tunis
ia
Nor
way
Chile
m3
Expected Ethanol Exports 2005/06
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
U.S
.
India
Net
her
lands
Japan
Jam
aica
Nig
eria
Kor
ea
Cost
a R
ica
Can
ada
Chin
a
Mex
ico
Turk
ey
Arg
entina
Sw
eden
Sin
gapor
e
Bel
giu
m
El Sal
vador
Finla
nd
Ital
y
Car
ibea
n
Ghan
a
Spain
Ven
ezuel
a
U.K
.
Sou
th A
fric
a
Dom
inic
an R
ep.
Wes
t In
die
s
Tunis
ia
Nor
way
Chile
m3
Will rise to 1.2bln / year from 2006
Czarnikow Biofuels indicative estimate
Brazilian Cane Production and Sugar Exports Projection
-
50
100
150
200
250
300
350
400
450
500
95/9
6
96/9
7
97/9
8
98/9
9
99/0
0
00/0
1
01/0
2
02/0
3
03/0
4
04/0
5
05/0
6
06/0
7
07/0
8
08/0
9
09/1
0
mln
ton
nes
-
5
10
15
20
25
mln
ton
nes
CaneSugar Exports
Projections
Asia-PacificEurope, NorthAfrica & Middle
East
Americas
Candidates for Change?
0
5
10
15
20
25
30
35
40
45
48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02
c per lb
Cuban Missile Crisis
Oil Price Shock
Oil Price Shock
Last Post-BoomTrough
SuezCrisis
KoreanWar
Old Range
The New Environment
New York Spot Prices
50
55
60
04
Historical Price Spikes
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