MAY 2019 RV PRICE: R 4 265.14 per ton of RV

Overview

  • Established on the 25th November 2015

• A non-profit organisation, registered with the Department of Social Development.

• A case for South Africa’s economic transformation in the agribusiness sector.

• A home for all progressive farmers – black and white, small, medium and large.


Special attention on supporting small scale and land reform farmers in respect of

• Ownership of freehold sugar cane farming land

• Equity in agro-processing factories (mills)

• Representation in the industry decision making structures

• and the farmers’ ability to speak for themselves and determine their desired future


JUNE 2019 RV PRICE for 2019/20 SEASON

SASA has declared the JUNE 2019 RV price in respect of cane deliveries in MAY 2019 as follows:

BASE PRICE OF CANE

RV % CANEAVG. PRICE
 Rand/Ton
9.5405.19
10.0426.51
10.5447.84
11.0469.16
11.5490.49
12.0511.82
12.5533.14
13.0554.47
13.5575.79
14.0597.12
14.5618.44
15.0639.77

Industry Average RV % Cane  - 12.08%    -   "d" factor -  0.399128     -   SASRI Extension Levy  - R 0.86

The RV price payable at the end of June 2019 in respect of cane deliveries in May 2019 was declared at R4 265.14 per ton

of RV. This was R59.45 per ton higher than the price last month, in respect of cane deliveries in April 2019. The main

contributor to the higher price was the improved export revenue estimate, which was driven by increased sugar production

(2,219m tons vs. 2.295m tons) combined with a weaker weighted average R/$ exchange rate (14.82 vs.14.47) and the

higher weighted average world market No.11 sugar price (US13.62c/lb. vs. US12.91c/lb.) Under normal circumstances the

increased sugar production, in isolation would have reduced the average return from exported sugar but the weaker

currency and the higher export price increased the average export return and thus had a positive impact on the price.


Industry sales in May were 2% above the monthly estimate but the cumulatively the sales were 3% below the estimate at

the end of May. It has been agreed that any change to the LMDE will be made after July 2019 sales are finalised. This implies that the LMDE for the season will most likely be adjusted in line with actual sales performance at that time. Dutypaid

imported sugar in May amounted to 3 620 tons, of which 2 958 tons was sourced from India. This is an indication that

current level of tariff protection is effective against most duty-paid imports, but government-subsidised Indian sugar still

poses a threat. There is opportunity to increase the notional price at this time and this possibility is being considered by

the industry.


The change in monthly RV input variables and corresponding changes in revenue are detailed in Table 2 below:

Table 2: Change in RV price input variable and revenue
RV Price - Change in input variablesLatestDifferencePrevious
Cane Production19 722 430164 97919 557 451
Sugar : RV Ratio93.11%-0.29%93.41%
Gross Sugar Production2 219 22114 2022 205 019
LMDE1 332 08001 332 080
RV Tons2 383 35222 6992 360 653
Sugar Notional Price - Refined9 47509 475
Sugar Notional Price - Brown8 64608 646
#11 World Price (wt avg)13.620.7012.91
R/US$ Ex Rate (wt avg)14.820.3514.47
RV Price4 265.1459.454 205.68
Change in RevenueLatestDifferencePrevious
Rebates307 072 1220307 072 122
Local Market Proceeds11 952 429 570011 952 429 570
Export Proceeds3 963 466 295360 492 0323 602 974 263
Molasses Proceeds726 191 7988 898 728717 293 070
Industrial Costs836 002 848631 728835 371 120
Total Grower Revenue (64.3127% of NDP)10 165 319 908237 158 8909 928 161 019

Tables 3 provides a range estimate for the estimate for the 2019/20 season.

Table 3: RV Price Range Estimate – 2019/20

Low EstimateMost Likely EstimateHigh Estimate
Gross Sugar Production2 300 0002 250 0002 200 000
RV % Cane12.08%12.08%12.08%
Sugar : RV Ratio93.41%93.41%93.41%
LMDE1 250 0001 300 0001 350 000
Rebates (R)307 072 122307 072 122307 072 122
No.11 (% exposure77.9%75.6%72.7%
No.11 (wt.avg)12.7613.1813.57
R/$ (% uncovered)97.32%97.32%97.32%
R/$ (wt. Avg.)13.545514.032114.5187
RV Price4 144.054 201.154 416.54
Notional Price Change 1Jul-19 0.00%0.00%5.00%
Notional Price Change 2Dec-19 0.00%0.00%0.00%
R/$ Exchange Rate ( Uncovered)13.5014.0014.50
No.11 price (unpriced)12.0012.5013.00
Refined %67.22%67.22%67.22%

Grower Structures

• Board Of Directors
• Central Executive Committee
• Regional Executive Committees
• Mill Area Committees
• Farmers Associations & Co-ops
• Individual Farmers

News

Monthly news updates can be found on our News Page in Zulu and english with all of the articles archived for downloads if you have missed out. Please check below for the latest news articles online