• The net spec position fell to its lowest level since 2020 last week.
• The No.11’s recovery likely means consumers will buy at cheap rates.
• Conditions have improved for refiners, with the white premium strengthening across the last week.

New York No.11 (Raw Sugar)

• The No.11 was sold aggressively by speculators across the past week, pressuring prices.
• The net position fell by 58.3k lots to +50.4k – its lowest level in over 18 months.
• The drop was driven by the opening of 40.3k new shorts and the closure of 18k longs.
• The K/N and N/V spreads have weakened significantly of late and are now trading around neutral.
• This, along with the falling flat price, is making buying a more attractive proposition for consumers.
• The price recovery back above 18 c/lb has likely been facilitated by commercial buying.

No.5 London (White Sugar)

• The No.5 has not seen the same pressure as the No.11, which means the white premium has strengthened considerably.
• The H/H broke above 100 USD/mt, and 2022 whites spreads are strengthening.
• This suggests that there’s good physical demand for white sugar in the market at present.

White Premium (Arbitrage)

• The H/H and K/K 2022 white premiums strengthened fast last week.
• Both are now around the 100 USD/mt level.
• This level remains slightly lower than the margin needed by the refineries, but we think cash values could help compensate for the deficit.
• It’s likely that re-export refineries are now looking to lock in tonnage for 2022.

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