White Sugar #5 Dec '17 (SWZ17)
|Contract||White Sugar #5|
|Tick Size||10 cents per metric tonne ($5.00 per contract)|
|Contract Size||50 metric tonnes|
|Trading Months||Mar, May, Aug, Oct, Dec (H, K, Q, V, Z)|
|Trading Hours||8:45a.m. - 6:30p.m. GMT|
|Value of One Futures Unit||$50|
|Value of One Options Unit||$50|
|Last Trading Day||Sixteen days preceding the first day of the tender period|
The white crystalline substance called "sugar" is the organic chemical compound sucrose, one of several related compounds all known as sugars. These include glucose, dextrose, fructose, and lactose. All sugars are members of the larger group of compounds called carbohydrates and are characterized by a sweet taste. Sucrose is considered a double sugar because it is composed of one molecule of glucose and one molecule of fructose. While sucrose is common in many plants, it occurs in the highest concentration in sugarcane (Saccharum officinarum) and sugar beets (Beta vulgaris). Sugarcane is about 7 to 18 percent sugar by weight while sugar beets are 8 to 22 percent.
Sugarcane is a member of the grass family and is a perennial. Sugarcane is cultivated in tropical and subtropical regions around the world roughly between the Tropics of Cancer and Capricorn. It grows best in hot, wet climates where there is heavy rainfall followed by a dry season. The largest cane producers are Florida, Louisiana, Texas, and Hawaii. On a commercial basis, sugarcane is not grown from seeds but from cuttings or pieces of the stalk.
Sugar beets, which are produced in temperate or colder climates, are annuals grown from seeds. Sugar beets do best with moderate temperatures and evenly distributed rainfall. The beets are planted in the spring and harvested in the fall. The sugar is contained in the root of the beet, but the sugars from beets and cane are identical. Sugar beet production takes place mostly in Europe, the U.S., China, and Japan. The largest sugar beet producing states are Minnesota, Idaho, North Dakota, and Michigan. Sugar beets are refined to yield white sugar and very little raw sugar is produced.
Sugar beets and sugarcane are produced in over 100 countries around the world. Of all the sugar produced, about 25% is processed from sugar beets and the remaining 75% is from sugar cane. The trend has been that production of sugar from cane is increasing relative to that produced from beets. The significance of this in that sugarcane is a perennial plant while the sugar beet is an annual, and due to the longer production cycle, sugarcane production and the sugar processed from that cane, may not be quite as responsive to changes in price.
Sugar futures are traded at the ICE Futures U.S., the Bolsa de Mercadorias & Futuros (BM&F), Kansai Commodities Exchange (KANEX), the Tokyo Grain Exchange (TGE), and the London International Financial Futures and Options Exchange (LIFFE).
Raw sugar is traded on the ICE exchange while white sugar is traded on the London International Financial Futures Exchange (LIFFE). The most actively traded contract is the No. 11 (World) sugar contract at the ICE exchange. The No. 11 contract calls for the delivery of 112,000 pounds (50 long tons) of raw cane centrifugal sugar from any of 28 foreign countries of origin and the United States. The ICE exchange also trades the No. 14 sugar contract (Domestic), which calls for the delivery of raw centrifugal cane sugar in the United States. Futures on white sugar are traded on the London International Financial Futures Exchange and call for the delivery of 50 metric tons of white beet sugar, cane crystal sugar, or refined sugar of any origin from the crop current at the time of delivery.
Prices - ICE World No. 11 Sugar prices on the nearest-futures chart (Barchart.com symbol SB) slid to a 4-1/2 year low in January 2014 of 14.70 cents per pound after the International Sugar Organization (ISO) raised its 2012/13 global sugar production estimate to a record 183.7 MMT and estimated a record 2012/13 global sugar surplus of 10.6 MMT. Also, the ISO predicted that sugar imports from China, the world's second-largest sugar consumer, would fall 36% yr/yr in 2014 to 2.35 MMT as the government phased out stockpiling after China sugar inventories soared to a record 6 MMT in 2013. In addition, India, the world's second-biggest sugar producer, said it would allow an additional 4 MMT of sugar exports in 2014 order to trim its sugar reserves that rose to a 5-year high of 8.85 MMT. Sugar prices recovered and moved to the high for 2014 in March at 18.40 cents per pound on Brazil drought concerns. Prices moved sideways through Q2 and then plunged in Q3, posting a 4-1/2 year low in September at 13.32 cents per pound. Thailand, the world's second-biggest sugar exporter, reported a record 2013/14 sugar harvest of 11.29 MMT and said it would export a record 9 MMT of sugar in 2014. The USDA estimated that despite a loss of Brazil sugar output from drought, 2014/15 global sugar ending stocks would be 42.2 MMT, the fifth straight year of surplus. Sugar prices recovered slightly into year-end and finished 2014 down -11.5% at 14.52 cents per pound.
Supply - World production of centrifugal (raw) sugar in the 2014-15 marketing year (Oct 1 to Sep 30) fell -1.5% to 172.458 million metric tons, below the 2012-13 record high of 177.557 million metric tons. The world's largest sugar producers in 2014-15 were Brazil with 20.8% of world production, India with 15.8%, and the European Union with 9.5%. U.S. centrifugal sugar production in 2014-15 rose +0.1% to 7.677 million metric tons. World ending stocks in 2014-15 fell -3.2% to 42.215 million metric tons. The stocks/consumption ratio fell -5.3% in 2014-15 to 24,700 metric tons. U.S. production of cane sugar in 2014-15 rose +2.1% to 3.740 million short tons and beet sugar production rose +1.6% yr/yr to 4.870 million short tons.
Demand - World domestic consumption of centrifugal (raw) sugar in 2014-15 rose by +2.2% yr/yr to a new record high of 170.996 million metric tons. U.S. domestic disappearance (consumption) of sugar in 2014-15 rose by +2.5% yr/yr to 12.244 million short tons. U.S. per capita sugar consumption in 2013-14 (latest data) rose +2.0% to 67.90 pounds per year, which was only about two-thirds of the levels seen in the early 1970s.
Trade - World exports of centrifugal sugar in 2014-15 fell -6.5% yr/yr to 53.697 million metric tons, below last year's record high of 57.437. The world's largest sugar exporter was Brazil, where exports in 2014-15 fell -8.4% yr/yr to 24.000 million metric tons, which accounted for 44.7% of total world exports. The next largest exporters are Thailand with 15.8% of world exports and Australia with 6.5%. U.S. sugar exports in 2014-15 fell -18.4% yr/yr to 250,000 short tons, which is down from the 15-year high of 422,000 seen in 2006-07. U.S. sugar imports in 2014-15 fell -6.3% yr/yr to 3.149 million short tons, down from the decade high of 3.355 in 2010-11.
Articles from the Commodity Research Bureau (CRB) Commodity Yearbook. The single most comprehensive source of commodity and futures market information available, the Yearbook is the book of record of the Commodity Research Bureau, which is, in turn, the organization of record for the commodity industry itself. Its sources - reports from governments, private industries, and trade and industrial associations - are authoritative, and its historical scope is second to none. Additional information can be found at www.crbyearbook.com. More commodity data from Commodity Research Bureau.
More commodity data from Commodity Research Bureau.