MONEY MASTER

Brazil’s wildfires and drought, which have disrupted the global sugar market , are putting increased pressure on Thailand and India to fill the supply gap. However, both countries are facing their own challenges, raising concerns about further instability in the market. The recent spike in sugar futures , reaching the highest levels since February, reflects fears over crop damage in Brazil, the world’s top sugar producer and exporter. This disruption is pushing up costs for consumer goods, such as soft drinks and candy, while traders are now focused on the output prospects of Thailand and India, both major sugar producers. While Thailand, the world’s second-largest sugar exporter, is expected to see a rebound in sugar production in the 2024-25 season, September floods have highlighted the weather risks that could delay the harvest if heavy rains persist. In India, the second-largest sugar grower, government support for ethanol production means sugar export restrictions are like...

A new tax on sugary drinks, proposed in Malaysia's upcoming Budget 2025, could impact manufacturers like Nestlé (Malaysia) Bhd, Berjaya Food Bhd, Fraser & Neave Holdings Bhd (F&N), and Farm Fresh Bhd. CIMB Securities notes that manufacturers may respond to the new tax by either raising prices or reducing sugar content in their products. Key Takeaways: Potential Impact on Pricing and Product Composition : Manufacturers may choose to increase selling prices to pass on the added costs of the sugar tax or reduce the sugar content to avoid the tax. Past behavior suggests that firms affected by similar taxes have adjusted ingredients rather than increasing prices. Additionally, manufacturers could expand their product ranges, introducing options with reduced sugar content or higher prices. Scope and Impact of the New Sugar Tax : The proposed sugar-sweetened beverage tax follows a previous increase in the sugar tax from 10 sen to 50 sen per liter, which successfully reduced sugary...

India will continue to restrict sugar exports to ensure sufficient domestic supplies and to boost ethanol production, according to sources familiar with the matter. Key Points: Domestic Supply and Prices: The government aims to maintain enough sugar for the local market at reasonable prices and use more cane for ethanol production. Export Restrictions: Allowing exports is currently not being considered, the sources said, as the discussions are confidential. Impact on Local Producers: Local sugar mills, which have been advocating for the relaxation of export restrictions, will be adversely affected by this decision. The curbs should help support global sugar prices, which have decreased by around 12% this year. India is the world’s second-largest sugar producer. Government's Position: A spokesperson for India’s food and commerce ministries did not respond to a request for comment. India introduced a quota system for sugar exports in the season ending September 2023 due to poor out...