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Brazilian crystal sugar premium at the lowest recorded level; flat price at the highest since March

Energy Transition

Platts Global Integrated Energy Model

Brazilian crystal sugar premium at the lowest recorded level; flat price at the highest since March


Platts crystal sugar physical premium assessed at $30/mt

Platts crystal sugar flat price assessed at $353.418/mt

Santos — The Brazilian white crystal sugar physical premium to export in containers plummeted to its lowest level since S&P Global Platts started publishing this assessment in 2014.

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On Oct. 19, Platts assessed crystal sugar 150ic in containers for November shipmen, at $30.00/mt premium to the ICE March (H) Sugar NY11 futures contract, a drop of $4/mt from the prior week and $12/mt lower on year.

Despite the plunging physical premium in the intertrade market, the Platts flat price assessment, which is calculate considering the ICE NY11 future contract at 1630 London time, converted to US$/mt, plus the physical premium has been in an upward movement since Sept. 15

Platts assessed the Brazilian crystal sugar flat price on Oct. 19 at 1630 London time at $353.418/mt, the highest settlement since March 5, when it closed at $358.242/mt. As a reference, on March 5, Platts assessed crystal sugar premium at $61.50/mt

Most of the cash premium fall has been a response from end buyers, which are trying to offset part of the surge in the ICE NY11 future contract by lowering the physical premiums.

Since the ICE NY11 October future contract expired on Sept. 30, the white sugar premium dropped 10%, from $87.16/mt to $78.46/mt, on Oct. 19. A lower white sugar premium is expected to decrease raw sugar demand from refineries and also the buying appetite for crystal sugar.

Sources suggested that the steep depreciation of the Brazilian real against the US dollar could have influenced the white premium, however, data does not support that conclusion.

The white sugar premium in Brazilian real equivalent settled on Oct. 19 at Real 438.11/mt, down 10.50% from Sept. 30, or exactly the same percentage change as when the US dollar currency is considered.

In the absence of some bullish signal that could support crystal sugar demand from Brazil, cash premiums may continue to offset the uptick of the NY11 future contract to attract some demand.