From Field to Fuel: Sugar & Ethanol Group

Video transcript

[Super:] Across the globe, StoneX professionals draw on in-depth market knowledge and direct personal connections to deliver a unique advantage to clients that we call “boot on the ground.”

[Super:] Bruno Lima Full Manager – Sugar & Ethanol Group, StoneX Consultoria em Futuros e Commodities Ltda

Bruno: Today we’re here at the Sugar Mill. We’re actually inside the biggest producer and biggest sugar export in the world. Basically our customers in the sugar industries cover the production side from the Sugar Mill, the sugar cane production. We also cover the sugar consumption side with the industries that produce candies, beverages, all of that, so we basically have an idea how people are actually buying the sugar and how people are selling the sugar

[Super:] Rafael Crestana, Risk Management Consultant, StoneX Consultoria em Futuros e Commodities Ltda

Rafael: So we are in Fini, which is one our clients. They are a candy manufacturer here in Brazil and we’re just visiting them today.

Bruno: Being here, and being with the customer, being at the field gives us a huge advantage because we can actually feel and see with our own eyes what is actually happening and see if the cane fields are actually healthy or if it’s not so healthy, if the stocks are so big or so small as we’re as we’re expecting, estimating, so this, I think, gives us a great advantage especially because we can, in advance, anticipate what might happen with the market, what might happen with the prices, all of that.

Rafael: On the agriculture commodities is the third most volatile over the past 10 years, I would say mostly because it’s heavily affected by weather events whether it’s in here, in Brazil. That’s the first producer of second depending on the cycle in India that has the monsoon rains taking effect on the whole of their production.

Bruno: We can’t talk about sugar if we don’t talk about ethanol, if we don’t talk about crude oil, if we don’t talk about exchange rates. Brazil is the biggest producer, the biggest export of sugar, and sugar is a direct competitor from ethanol because from the sugar cane you can produce both sugar and ethanol and whatever is being better that’s where the sugar meat will take the decision to produce.

[Super:] Caio Santos Risk Management Consultant, StoneX Consultoria em Fururos e Commodities Ltda

Caio: We know that markets are volatile and there are many events that can change the prices, change the course of prices and that can affect your business in an expressive way so it’s very important to have, to develop our strategic planning, to make your purchases or your selling activity more predictable and, with that, protect your margins and good risk management.

Bruno: We’re just about to go into their warehouse where they keep the inventor for the inter harvest period. This is very important for us to analyze and to know this information so we can actually plan and basically hedge the value of all the sugar they’re holding back here and especially in the inter-harvest period, where they’re not producing anymore, so we’re expecting higher prices, we’re going to kind of have to be like exact on when to sell and how to sell the product. All the statistics, basically they come after the fact, have happened already and being at the customers, being in the field you can actually see that in advance and anticipate that and use that as a hedging strategy to be a step ahead of every else and that’s how we basically add value to the customer.

Rafael: We have an advantage of being a global company and therefore, because sugar is a commodity that’s globally traded, we have offices everywhere, so our information is as good as it gets, from the fields.

Bruno: We couldn’t do such a good job if we weren’t out in the field with the customers actually talking to them and having the real feeling of how things are going. It wouldn’t be possible. We would just be like everybody else.

[Super:] Boots on the Ground