- The sugar futures markets have taken another hit due to COVID fears.
- We think the specs have continued to trim their raw and white sugar positions.
- Despite the large recent price movement, the spread structure in raws and whites is largely unchanged.
New York No.11 (Raw Sugar)
- The No.11 has weakened well below 19c/lb, once again, with the increasingly severe COVID situation raising concerns amongst the specs.
- This is an opportunity for industrial consumers to buy, though the spread structure remains relatively steady, which is likely inhibiting large forward buying.
- The withdrawal of specs means there’s room for them to return to the market if the conditions become attractive to them once more.
No.5 London (White Sugar)
- The No.5 has come under pressure again with front month dropping below 500 USD/mt.
- The spread structure has flattened slightly, which could be positive for physical demand.
White Premium (Arbitrage)
- The 2022 white premiums are slowly strengthening still.
- However, the level remains lower than the margin needed by the refineries, especially considering how high freight rates have impacted refiner costs.
- This level is making it difficult for re-export refineries to operate at present.
Other Insights That May Be of Interest…
The World Needs More Sugar…Who Can Help?
The World Needs More Sugar…Can India Help?
The World Needs More Sugar…Can Brazil Help?
The World Needs More Sugar…Can Thailand Help?
Explainers That May Be of Interest…
Thailand’s White Sugar Industry
