Platts launches CFR Indonesia raw sugar import parity matrix Aug 4

S&P Global Platts has launched a daily calculated CFR Indonesia raw sugar import parity matrix effective Aug. 4, 2021.

The calculations represent the landed price into Indonesia of Platts Thai Raw HiPol sugar for prompt shipment cargoes, comprising cash premiums from both origins, freight and import taxes. The launch of similar calculations using Brazil VHP sugar will be delayed until Sept. 1, 2021.

Platts first proposed launching the CFR Indonesia import raw sugar parity matrix in a subscriber note published June 23, 2021: http://plts.co/ffEZ30rPUXq.

Thailand had traditionally been a key exporter to Indonesia, one of Asia's largest raw sugar buyers, making up almost 70% of total imports into Indonesia. 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. According to Platts Analytics, Indonesian raw sugar imports from Brazil rose to 1.388 million mt in 2020 from zero in 2019.

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

The import parity is published in dollars per metric ton.

The import parity calculation is as follows:

The FOB Thailand assessment includes the quality or polarization premium for Thailand at 3.75% to the premium assessment, while a 4.2% pol premium applies for Brazilian VHP.

The freight for Brazil to Indonesia is 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 publication.

The freight for Thailand to Indonesia is basis 25,000 mt cargo size from Laem Chabang in Thailand to Ciwandan, loading 7-20 days forward from the date of the publication.

The import levy on Thai sugar is 5% and a flat duty of Indonesian Rupiah 550,000/mt for Brazilian raws.

The levy on Brazilian raws into Indonesia is calculated in dollars per metric ton using the relevant daily exchange rate published by the Indonesian central bank https://www.bi.go.id/id/statistik/informasi-kurs/jisdor/Default.aspx

The exchange rate follows the Indonesia holiday schedule, and on days when there is no daily exchange rate Platts will reference the previous day's exchange rate.

The new assessments appear on Platts Agriculture Alert page PAA 2512, Global Sugar Market Report and under their price database codes as below:

MDC Symbol Bates Dec Freq Curr UOM Description

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

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

SG SGAAI00 c 2 DW USD MT Thai HiPol Sugar CFR Indonesia Import Parity

SG SGAAF00 c 2 DW USD MT Thai HiPol Sugar Pol Premium

The launch date of the following symbols has been delayed until Sept. 1, 2021.

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

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

SG SGAAL00 c 2 DW USD MT Raw Sugar Brazil VHP CFR Indonesia Sugar Tax

SG SGAAJ00 c 2 DW USD MT Raw Sugar Brazil VHP Pol Premium

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