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Insight Focus

  • The No.11 sugar futures traded sideways, hovering around 26c./Ib.
  • Producers continue to hedge into these higher prices.
  • The H/H white premium currently stands at 125USD/mt.

New York No.11 Raw Sugar Futures

The No.11 sugar futures traded sideways over the past week, hovering around 26c/Ib.

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With raw sugar prices at 26c/Ib for the second week in a row, producers added 34.6k lots of new hedges. Consumers also added to their cover, by around 29.2k lots. This is likely to have been final book-management ahead of the October’23 raw sugar futures expiry.

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Turning our attention to the speculators, they have also increased their long and short positions, adding around 7.2k lots and 2.7k lots, respectively.

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With contracts strengthening across the board, the No.11 forward curve remains inverted in 2024 and 2025.

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London No.5 Refined Sugar Futures

Over the course of last week, in the days leading up to the No.5 futures expiry, the No.5 sugar futures rose from 719USD/m at the start of the week to 730USD/mt last Friday.

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During this timeframe, speculators decided to close out approximately 1.8k lots of positions, reducing net spec position to 31.5k lots.

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With contracts strengthening cross the board, the No.5 forward curve remains inverted.

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White Premium (Arbitrage)

With the No.5 and No.11 making similar moves in recent weeks, the H/H white premium has been hovering around 125USD/mt.

The refined sugar market is expected to be slightly undersupplied for the remainder of 2023 and the majority of 2024, as evidenced by comparatively strong K/K and Q/N white premiums, both of which are currently standing at 143USD/mt.

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We believe that many re-export refiners require at least 90-105USD/tonne over the No.11 to be profitable, which means that the spot white premium provides comfortably enough for these refiners to maximize their throughput.

At this level, higher-cost or discretionary refiners may begin to consider re-exporting in addition to serving their domestic markets.

For a more detailed view of the sugar futures and market data, please refer to the appendix below.

No.11 (Raw Sugar) Appendix

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No.5 (White Sugar) Appendix

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White Premium Appendix

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Tabasoom Watak

Tabasoom joined Czarnikow in August 2022 as an Analyst Intern, shortly after graduating from King’s College London in July with a BSc in Global Health and Social Medicine (with Pharmacology). She is responsible for expanding Czarnikow’s knowledge and expertise in biomass & starches, as well as delivering the sugar premium package on Czapp.

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