Brazil will be in short supply again

BRAZILS

BRAZIL PRICE RISES AGAIN

currency has been a major factor a decline past 9 months of some 10% sterling weakening v the us dollar

Dollar is weakening again so some light at the end of the tunnel, this will help a little but in the mean time Brazils a dollar based commodity is rising

Brazils are almost cleared at origin & unlike many years in the past there is no carry over of the previous crop.  The crop in Brazil is very short & although Bolivia looked ok, there was very little coming from Brazil into Bolivia this year,  the usual risk for crackers who did not yet again receive all the raw material already financed by them.

Many shippers were still delivering goods they did not fulfill at the end of the last crop, some did this & some asked to extend again for another year, some of these shippers in fact were short on goods coming from the interior & also some were already looking at selling at a much higher price & taking a profit & not carrying or taking on losses.

There was some support sponsored co by the government they paid top prices & promises of extra payments later or on the never never,  this did gain the government votes & in a way a control of prices, on a short crop this did not help export prices.

Many Crackers / shippers made tremendous losses last year selling too low in order to clear the 2008 crop & selling new 2009 crop at levels around 1.45 /1.55 / 1.65, so they took losses & then as they sold the 2009 crop too low, prices tumed & rose to very high levels, they claim they made further losses with the rise i guess the internal trading market paying high prices for Brazils, one of the largest shippers has been quiet & honoured some of his carried over contracts but really was not a fresh seller for many loads as he had been in the past leaving supplies very short.  Some of the old contracts were shipped & importers in the eu & USA used the cheap B/F contracts  to buy some of the customers orders & in reality creating a false market. The market today has already traded at $ 3.25 - 3.35 fob, also ex store has traded as high as $3.45, still in the Eu we hear a false market offers at as low as $3.25 ex store, some of these offers are there to keep the market down whilst they are maybe giving buyers a false sense of security & holding off from buying or taking forward cover, they are trying to keep a lid on price rises in order to get their o/s shipments from origin & also whilst negotiating close out of contracts at lower levels

We will see a rise without doubt, i predicted some months ago that we would see price rises, we now are faced with price some $1.10./$1.30 per lb higher

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