- The sugar futures markets have recovered after prices came under pressure due to Omicron concerns.
- The specs have significantly reduced their position in raw sugar.
- Despite the large recent price movement, the spreads in raws and whites are largely unchanged.
New York No.11 (Raw Sugar)
- The No.11 weakened well below 19 c/lb after Omicron caused speculators to close positions.
- Since, however, there’s been a strong price recovery with the No.11 again pressuring 20 c/lb.
- This opportunity was taken by industrial consumers who have increased their long paper holding, though not by a massive amount.
- The spread structure has remained relatively steady, which will likely inhibit large forward buying from re-export refiners.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 market has rebounded, after the pressure created by the spec exit.
- The H’22 contract is still below historical levels, which could be bearish for physical demand in the short term.
White Premium (Arbitrage)
- The 2022 white premiums have continued to slowly strengthen.
- 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…
World Sugar Market Five-Year Forecast
Market View: New Czapp, Same Sugar Market
Who is Buying and Selling Raw Sugar?
