S&P Global Platts has launched Brazil-origin prices to support its daily calculated CFR Indonesia raw sugar import parity matrix effective Sept. 1, 2021.
The calculations represent the landed price into Indonesia of Platts Brazil VHP sugar for prompt shipment cargoes, comprising cash premiums from both origins, freight and import taxes.
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 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 Brazilian assessment includes the quality or polarization premium for Brazil at 4.2% to the premium assessment.
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 import levy is 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 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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