S&P Global Platts will launch CFR Indonesia import raw sugar parity matrix Aug 4

S&P Global Platts will launch a daily calculated CFR Indonesia raw sugar import parity matrix, effective Aug. 4.

The calculation will compare the landed price into Indonesia of Platts Thai Raw HiPol sugar and Brazil VHP sugar for prompt shipment cargoes, comprising cash premiums from both origins, freight and import taxes.

Thailand had traditionally been a key exporter to Indonesia -- one of Asia's largest raw sugar buyers -- making up almost 70% of its total imports. However, a change in Indonesian government policy allowing for the importation of raw sugar with a minimum 600 ICUMSA level, coupled with two consecutive seasons of poor Thai crops, has led to a significant drop in Thai sugar imports into Indonesia.

Traders and Indonesian refineries have since begun to switch their requirements to alternative origins, including Brazil and India. Indonesian raw sugar imports from Brazil rose to 1.388 million mt in 2020 from nil in 2019, according to S&P Global Platts Analytics.

The CFR Indonesia import parity price for Thai HiPol will be published at the 4:30 pm (0830 GMT) Singapore close and will follow Singapore's publishing schedule, while the Brazilian VHP will reflect the 4:30 pm (1530 GMT) London close and follow Brazil's publishing schedule.

The import parity will be published in $/mt.

The import parity calculation would be as follows:

Based on the Intercontinental Exchange (ICE) contract terms, the FOB Thailand assessment will include the quality or polarization premium for Thailand at a 3.75% to the premium assessment, while a 4.2% pol premium will apply for Brazilian VHP.

The freight for Brazil to Indonesia will be basis a cargo size of 50,000 mt sugar from Santos, Brazil, to Ciwandan, Indonesia, loading 15-30 days forward from the date of the assessment. The freight for Thailand to Indonesia will be basis a 25,000 mt cargo size from Laem Chabang in Thailand to Ciwandan, loading 7-20 days forward from the date of the assessment.

The import levy on Thai sugar is 5% and a flat duty of Rupiah 550,000/mt for Brazilian raws. The levy on Brazilian raws into Indonesia will be calculated in $/mt using the relevant daily exchange rate published by the Indonesian central bank https://www.bi.go.id/id/default.aspx. The exchange rate will follow the Indonesia holiday schedule, and on days when there is no daily exchange rate Platts will reference the previous day's exchange rate. Thailand to Indonesia's import parity will follow the Singapore holiday schedule, while the Brazil to Indonesia parity will follow Brazil's holiday schedule.

The prices will appear in Platts Agriculture Alert and the Global Sugar Market Report:

MDC Symbol Bates Dec Freq Curr UOM Description

SG SGAAG00 c 2 DW USD MT Thai HiPol Sugar CFR Indonesia Before Tax

SG SGAAK00 c 2 DW USD MT Raw Sugar Brazil VHP CFR Indonesia Before Tax

SG SGAAH00 c 2 DW USD MT Thai HiPol Sugar CFR Indonesia Import Parity

SG SGAAM00 c 2 DW USD MT Raw Sugar Brazil VHP CFR Indonesia Import Parity

Please send all feedback and questions to asia_ags@spglobal.com and pricegroup@spglobal.com.

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