Sugar.Hedge

@hedgesugar is a dedicated advocate for social justice, equity, and community service, known for their unwavering commitment to fairness.

[Sugar.Hedge @HedgeSugar]

The Amateur Scam That Keeps Printing Fees

The worldwide sugar industry, encompassing physical traders, futures brokers, consulting firms, analysts, and even major trading houses, operates with a striking level of amateurism.

Virtually 100% of the service providers are structurally biased toward the upside. Bullish narratives dominate because reality simply does not sell. It does not generate fees, it does not fill conference rooms, and it certainly does not get people to pick up the phone.

In a tough world where life and business are already difficult enough, optimism pays the bills. Pessimism is bad for business. In this sea of nonsense, one voice stands out as a rare island of clarity and intellectual honesty: @BClyde62937

Following her posts has been both interesting, funny and, at times, satisfying, precisely because she refuses to join the herd, as pointed out by a comment in one of her posts.

The Ritual of Useless Crop Tours

Consider the endless parade of "crop tours" in Brazil, India, or Thailand. Photos of fields, dramatic videos from dusty roads, and confident forecasts from visitors who spend a few days driving around, eating picanha and drinking "caipirinhas".

The irony is brutal: if local millers, who were born, raised, and have worked in these regions their entire lives, cannot accurately forecast their own crops, what chance does an outsider in a rental car have ? Many of these so-called experts can barely distinguish sugarcane from bamboo, yet they produce reports to justify advisory fees. They feed the bullish bias. Meanwhile, real fundamentals are ignored.

What No One Talks About

- How often do you see serious analysis of demand?
- Consumption trends?
- The impact of formula changes in food and beverage? - The explosion of GLP-1 drugs and their potential effect on sugar intake (with the notable exception of @StephenGeldart
- Geopolitical realities, wars, energy shortages, lack of gas? NEVER.

In Brazil, instead of stopping at gas stations during crop tours to chat with drivers and "frentistas" (station attendants) about ethanol versus gasoline preferences or speaking with fuel distributors and banks about economics, analysts prefer pretty pictures of cane fields.

Consumer tours? Nonexistent.

When was the last time you saw specialists visiting Coca-Cola to discuss the strong growth of Coke Zero, or analyzing Mars and other major users?

How many reports address sugar taxes in different jurisdictions?

How many analysts have studied the growth forecasts of Eli Lilly and Novo Nordisk and connected those dots to future caloric sweetener demand? Zero.

A Political Market, not a Free One

The sugar and ethanol market is fundamentally global and political. Prices do not need to cover anyone's cost of production in a pure economic sense because sugar is not a free market, it is a highly managed, politicized one. Yet the analysis rarely reflects this complexity.

How many analysts conducted a proper crop tour in China and correctly anticipated production around 13 million tons?

How many explained that as prices fall, China imports less sugar to protect domestic producers when international levels drop below local costs?

How many highlighted India's nearly 4 million tons of flexibility between ethanol and sugar production—enough to comfortably guarantee supply, as demonstrated in 2023?

How many wrote that despite lower imports, Indonesia did not run out of sugar ? Could it be that consumption is way lower than forecast ?

Funds short ? How many highlight that they are simply front-running producers that are historically underpriced ?

The answer, once again, is none. The industry prefers simple stories: tight supplies, bullish charts, weather scares, and glowing production forecasts that conveniently support higher prices.

Depth, contrary evidence, and demand-side rigor are in short supply. This is not serious analysis; it is marketing dressed up as research.

Until the incentive structure changes—until bearish realities generate as much revenue as bullish hype—the sugar world will remain an amateur arena dominated by one-sided optimism and loss-making, high-debt cows.

[Sugar.Hedge @HedgeSugar]

UNICA is the perfect reflection of a decadent and deeply amateur industry.

One that spends all its energy criticising others, and carries such an inflated ego — perhaps a mask for its own insecurity — that it believes everything revolves around Brazil, in a market that has long stopped caring. And why would it? Brazil is too predictable: enslaved by its cash flow needs and crippled by logistical constraints.

This is an industry that spends lavishly on annual sugar dinners — perhaps because they resemble an Alcoholics Anonymous meeting more than anything else, where one goes to feel better by seeing people in a worse shape than oneself.

The industry spent years talking down corn ethanol, only to watch two groups take over completely and deliver a combined net profit — a forbidden word in an EBITDA-obsessed world — larger than that of all sugar mills combined. No, I am not exaggerating.

This is an industry that cheers for catastrophes: first the war, hoping it would push gasoline prices up; now El Niño. An industry that fails to grasp that any bad macro news hurts them more than anyone else, precisely because they are over-indebted.

An industry that has turned self-sabotage into an art form. The level of amateurism is such that mills invariably turn bullish at the peak — and instead of hedging and locking in the opportunity, they get even more excited and buy back. Yes, as absurd as it sounds.

But what do you do when sugar and ethanol prices fall below the cost of production?

Stop publishing UNICA's bi-weekly report.

Genius.

Old Proverb: "What the eyes don't see, the heart can't feel."

A government can manipulate or attempt to conceal inflation numbers — but it has never worked and never will. Sooner or later, reality slaps you in the face. People feel it in their daily lives, and when elections come, politicians face that reality and pay for it — though not without a fight, which means pouring money into publicity in a futile attempt to fool the population.

Any resemblance to UNICA is not merely coincidental. What are they doing now? Hiding production numbers and spending on publicity.

Reality screams loudly.

Keep down this path. Keep denying. Keep fooling yourself. But be ready for a slap in the face — or more likely, a Mike Tyson punch.

[Sugar.Hedge @HedgeSugar]

Brazil Sugarcane’s Embarrassing Turn:
Loud Critics Now Hoping for Worldwide Misery

For years, Brazil’s sugarcane mills loudly denounced corn-based ethanol producers as inferior, unsustainable, or somehow unworthy. How times have changed.

Today, one barely needs to search to find just two major corn ethanol players generating more profit than the entire Brazilian sugarcane sector combined.

Yet here we are: while a few forward-thinking mills have quietly adapted, the great majority remain trapped in a pathetic cycle of wishful thinking. They pin their hopes on global chaos - skyrocketing crude prices, fertilizer shortages, or convenient geopolitical wars - to magically restore their lost edge.

This is not strategy. It is strategic surrender dressed up as optimism. Hoping the rest of the world suffers so you can survive is not merely fragile; it is embarrassingly low-level behavior for an industry that once prided itself on superiority.

The Delicious Irony of Praying for Higher Oil Prices

The contradiction reaches peak absurdity with crude oil. Higher prices do not kindly anoint sugarcane ethanol (or sugar, for that matter) while punishing everyone else. They slam diesel costs through the roof—precisely the fuel that powers harvesting, trucking, and distribution for sugarcane mills. Meanwhile, those same high diesel prices make it far more attractive for farmers to sell corn locally rather than export it, handing corn ethanol plants a stronger domestic position right in Brazil’s own backyard.

On a wider scale, prolonged high energy prices simply crush demand. Struggling consuming countries cut back further, and governments—ever eager for votes—shower even more subsidies on local producers, be they sugarcane or beet.

The mills cheer for turbulence abroad, only to watch it boomerang straight into their own costs and shrinking markets.

And it gets even better. The very spike in crude, fuel, and fertilizer prices these mills are desperately wishing for would fuel broader inflation, prompting banks to aggressively increase lending costs and widen credit spreads.

With the largest sugarcane producer already flirting with bankruptcy, risk-averse banks will be even less forgiving. If there is one thing Brazilian sugarcane mills possess more than anyone else, it is massive debt. The resulting surge in financing costs would brutally squeeze margins and threaten the survival of many over-leveraged operations.

Cheering for the conditions that could sink you is a special kind of financial masochism.

The Real Fight: Costs, Innovation, and Brutal Market Reality

Instead of burning money on yet another trip to New York, these executives would do far better to stay home and fix what actually matters: slashing production costs, lifting yields, squeezing more revenue from every ton, and fiercely protecting their domestic turf.

The electric vehicle wave is no longer coming — it has arrived. In the first quarter of 2026, EVs already represented over 66% of imports. The future of liquid fuels is shrinking faster than many care to admit, and denial will not slow it down.

And while everyone obsesses over oil prices and EVs, an even quieter tsunami is building: GLP-1 receptor agonists — the Ozempic, Wegovy, and Mounjaro class of drugs.

Almost no one in the Brazilian sugarcane industry wants to talk about them, but they are exploding in adoption. These appetite-suppressing wonders are slashing cravings for sugar, sweets, and sugary drinks (with users cutting sugary beverage intake by up to 65%), driving down overall calorie consumption, and reshaping food demand worldwide. In a world with high obesity and diabetes rates, wider access and falling prices will deliver a direct slap to sugar demand. While mills dream of higher crude prices saving them, GLP-1s are silently eating their lunch — one suppressed sweet tooth at a time.

Cheering for a selective El Niño is equally delusional.

Reality check: El Niño years like 2015 and 2023 produced some of the largest sugarcane crops on record, flooding the market with volume and hammering prices. Hoping for convenient climate chaos is not a strategy — it’s Russian roulette with your own balance sheet.

Discipline Beats Distraction Every Time

Of course, there is undeniable charm in flying to New York, sipping overpriced wine with fancy labels in elegant restaurants, and pretending the world still revolves around your spreadsheets/costs. For a fleeting moment, one can feel like a prince. The market, however, could not care less about your feelings or your frequent-flyer status. It rewards cold efficiency, superior performance, and relentless innovation — the very things the corn ethanol industry has delivered while others complained.

The path forward is brutally simple: stop cheering for global misfortune and start building a genuinely competitive, adaptable business.

Resilience is not found in desperate prayers for higher oil or foreign crises. It is created through discipline, focus, and the courage to face reality head-on.

Those who grasp this will shape whatever future the industry still has. The rest will simply watch from the sidelines, wondering why the world refused to cooperate with their fantasies.

[Sugar.Hedge @HedgeSugar]

@BClyde62937 kudos to @isiscarol14 who was the first to write about the impact of GLP-1 on demand ! 👏