Sugar Futures and Market Data: 18th October 2021

• Order flow remains weak in the No.11, with limited buying interest from both specs and consumers.
• However, the dynamics for refiners are improving with the No.11 spreads flattening and the WP strengthening
• The outlook for refined sugar demand has continued to improve, too, with the Z/H continuing to strengthen fast.

No.11 New York (Raw Sugar) 

• With 5 months to go to the H expiry there has been minimal order flow in the No.11 market.
• The backwardated spreads were encouraging demand deferral by consumers, but the forward curve is now flattening for 2022 contracts – which could incentivise buying of raws
• Consumers remain poorly covered for 2022.

No.5 London (White Sugar) 

• The white sugar physical market is showing signs of recovery, with sentiment looking more positive as the net spec long continues to grow.
• This is supported by the rapidly strengthening Z/H spread and the growing H/H white premium.

White Premium (Arbitrage) 

• White premiums remain lower than profitability margins needed by refineries, especially considering how high freight rates have impacted refiner costs
• However, with the H/H is continuing to show strength which hints at a more positive outlook for the white premium.