Sugar

01

Market overview

Exported sugar divides into raw and white. Raw sugar — above all VHP, of very high polarisation — ships in bulk to destination refineries and is referenced to ICE's Sugar No. 11 contract in New York. Refined white sugar is graded by colour on the ICUMSA scale, where ICUMSA 45 is the reference specification, and its price benchmark is White Sugar No. 5 in London. Brazil is the world's largest producer and exporter, with shipments concentrated in Santos and Paranaguá, and the Centre-South harvest sets the pace of supply through the year. It is also a market known for the circulation of unbacked offers — typically ICUMSA 45 in very large recurring volumes, with a predefined “procedure” and a long chain of intermediaries.

02

Trading forms

We cover raw VHP sugar in bulk, by vessel, and white sugar in bags or big bags, in bulk or in containers, on an FOB basis at the port of shipment or CFR and CIF at destination. Price is fixed or built as a premium or discount to the exchange, and independent quantity and quality inspection at loading is the rule. Single-lot contracts and monthly delivery programmes go through the same review.

03

Counterparty sought

On the sell side, mills and trading houses with product allocated for export. On the buy side, refiners in the case of VHP, food and beverage manufacturers, importers and traders with a defined destination and payment instrument. The first filter is whether the volume is consistent with the capacity of whoever offers it — and of whoever claims to buy it.