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.
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