Olam International shutters its sugar trade desk amid dismal margins environment
The firm’s spokesman broke the news on Tuesday regarding the shut down, amid the mounting pressures faced by sugar trading houses on depressed sales.
And another one bites the dust. Agricultural commodities trading firm Olam International will be closing down its sugar trade desk, the firm said on Tuesday, amid the mounting pressures faced by sugar trading houses on depressed sales.
The update, which was given by the firm’s spokesman Nikki Barber, sees the trader joining other sugar trading houses who have either downsized or crimped down on their sugar business.
Raw and white sugar futures, which are benchmarks used for the pricing of physical raw and white sugar, are at their lowest levels in 10 years, due to a global supply glut.
As of Tuesday, January 8th, March white sugar rose US$0.60, or 0.17%, to US$345.40 per tonne on the Intercontinental Exchange, slackening compared to the price of US$390.90 per tonne a year ago.
According to Olam, it owns two sugar mills in India, crushing in excess of more than 1 million tonnes of sugarcane from farmers.
Other firms in the industry have been making changes to their sugar business to adjust to the harsh business climate.
Late last year, sugar and ethanol maker Biosev SA hired an investment banker to find buyers for its sugar plants in Brazil, a Reuters report said. The firm had, before the announcement, sold two mills it owned in northeast of Brazil for a total of R$273.60 million (US$73.68 million).
In August, Singapore-based agribusiness firm Wilmar International Limited bought over the books for sugar trading from its rival Bunge for an unstated amount.
Olam’s shares were higher by 1.16% or S$0.02, to S$1.75, at 4.15pm Singapore time.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
“Managing risk, size and strategies” seminar
Join our free seminar on Tuesday Dec 10 at 6:00pm and get a better understanding of how to utilize size management when opening a trade and how to find the ideal risk/reward balance.
Live prices on most popular markets