Sucro Limited · TSXV:SUGR
Sucro — Marex presentation, October 2024
14 slides from Sucro's conference presentation, October 2024
Slide 1: The US and Mexico: What these Step Brothers mean for the World Market
The US and Mexico: What these Step Brothers mean for the World Market Oliver Hire October 2024
Slide 2: Sucro: An Innovative North American Refiner
SUCRO: AN INNOVATIVE NORTH AMERICAN REFINER INBOUND LOGISTICS & LOW CAPEX FLEXIBLE OUTBOUND LOGISTICS SOURCING SALES WAREHOUSING COST PRODUCTION & WAREHOUSING REFINING UNDER EXPANSION UNDER CONSTRUCTION 2
Slide 3: Why Does 'The US & Mexico' Matter?
WHY DOES ‘THE US & MEXICO’ MATTER? USA has the ability to Mexico has the ability import significant to be a World Market volumes of World importer, or a World Market sugar Market exporter USA has the ability to determine Mexico as a World Market exporter/importer 3
Slide 4: US & Mexico Makeup (basis October '24 WASDE)
US & MEXICO MAKEUP (basis October ’24 WASDE) BEET CANE CANE 5.3m 4.1m 5.09m TOTAL SUPPLY: 14.2m US: 395k? 1m? CONSUMPTION: 12.5m WORLD: 446 (23/24) STOCKS: 1.78m 932 (24/25) CONSUMPTION: 4.6m TRQ (RAWS): 1.62m MEXICO: 395k? 1m? STOCKS: 1.4m RE-EXPORT/ORGANIC: 200k CAFTA: 148k HI TIER: 345k (24/25) 4
Slide 5: How Mexico & US Became Relevant for the World Market
HOW MEXICO & US BECAME RELEVANT FOR THE WORLD MARKET 1994 2008 2013 2014 CURRENT FRAMEWORK Export limits: US imposed Minimum export price Suspension Agreement Raws polarity restrictions Refined sugar restrictions 1994: Implementation of NAFTA 2008: Sugar is fully duty free into the US 2008: 1.4m Mex
Slide 6: Mexico as an Importer: Why / How / What?
MEXICO AS AN IMPORTER: WHY / HOW / WHAT? CLIMATIC - Adverse weather: 23/24 - 80% cane growing areas experienced moderate to exceptional drought. Driest cane fields in 2 decades SYSTEMIC - Aging cane yields. Aid is now given directly to the farmers rather than through unions. So, there is less contro
Slide 7: Mexico as an Importer: Why / How / What?
MEXICO AS AN IMPORTER WHY / HOW / WHAT? - Imports became a container rate play. Diverse origination, as far afield as Saudi and Thailand - Pace of imports led to container demurrage issues. Containers still stuck in ports today 7
Slide 8: US as a Significant Importer: Why / How / What?
US AS A SIGNIFICANT IMPORTER: WHY / HOW / WHAT? Top 10 Global Sugar Importers 23/24 Source: Statista 8
Slide 9: US as a Significant Importer: Why / How / What?
US AS A SIGNIFICANT IMPORTER: WHY / HOW / WHAT? - 51 countries imported high tier into the US in 2023/24 - 46% of the world’s 111 producers - 33 different ports (no.16 = 5 refinery ports) 9
Slide 10: Mexico & US as Importers: Why / How / What?
MEXICO & US AS IMPORTERS: WHY / HOW / WHAT? In 23/24 Mexico/US took in 2m mt of World Market Sugar, outside of established quotas Majority of additional US imports are in the form of raw sugar 16,200 lots of no.11 liquidity away from no.16. 2c Bid/Offer spread Bids up raw sugar cash competition in B
Slide 11: Mexico as an Exporter: Why / How / What?
MEXICO AS AN EXPORTER: WHY / HOW / WHAT? US reduction in import demands - Inevitable stock build as a consequence of High Tier parity - 23/24 STU estimated at 17.98%. Highest in 20 years - Weather: Record beet crop. Louisiana rebounding to a record high of 2.111 million STRV. after a drought-stricke
Slide 12: Mexico as an Exporter: Why / How / What?
MEXICO AS AN EXPORTER: WHY / HOW / WHAT? Structural export capacity: 150 -200k per month LEFT: Mexican world market exports 21/22 by country and by specification CONADESUCA 1.Veracruz: The largest and most significant port for sugar exports 2.Progreso: Located for exports out of the Yucatán Peninsul
Slide 13: Mexico as an Exporter: Why / How / What?
MEXICO AS AN EXPORTER: WHY / HOW / WHAT? - Volume is predominantly bulk raws exported onto no.11: Futures risk - 18/19: Large crops in Mexico and US. US reduces access to Mexico, and Mexico has to export 1.3m to the World Market. No.11 “simultaneously” trades at 10yr lows - Is Mexican bulk raw sugar
Slide 14: Conclusion: The Step Brothers Are 'Getting On'
CONCLUSION: THE STEP BROTHERS ARE “GETTING ON” - Avoid the bureaucratic complexities of quota increases - Treasury kept fed with high tier dollars - Market stays above CCC loan rates. Immune to oversupply: 17.95% 2013. Sub 20c #16 US forfeitures. CCC buys 300k. 2024: 17.98%. Prices at 60c + - US ref