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Spoon with white sugar

ICE extends white sugar futures curve allowing hedging out to December 2025

March 2023
David Farrell
David Farrell
COO, ICE Futures U.S.
Intercontinental Exchange

Sugar is a commodity with one of the longest histories of trade, with roots in commerce going back thousands of years. Sugar futures also have an extensive past which can be traced to the United Terminal Sugar Markets Association in 1888. Today, futures are used by farmers wanting to secure the future prices of their crops, by commercial purchasers of the products, and by speculators who add liquidity to markets with their trades. As the home of raw and refined sugar trading, ICE offers benchmark contracts to trade and hedge both products.

The ICE Sugar No. 11 contract prices the physical delivery of raw cane sugar across the globe, whilst the ICE Sugar No. 16 Contract is the reference price for the raw sugar in the US. White sugar is derived from sugar beet or the result of refining raw cane sugar to remove excess molasses left on the crystals, resulting in a product that is lighter in color than its raw counterpart. Refined white sugar may be traded and hedged via ICE White Sugar Futures, the global benchmark for the pricing of physical white sugar and actively traded by the international sugar trade, sugar millers, refiners, and manufacturers as well as by managed funds and both institutional and short-term investors.

This month, ICE extended the White Sugar futures contract curve by introducing six additional delivery months, so that fourteen delivery months for futures and options contracts are now available for trading. The extension of the curve, which closely matches that of the No.11 contract, enables producers, consumers and merchants to hedge their exposure to much further forward in white sugar. An added benefit is that market participants now have the opportunity to trade what is called the “white premium” arbitrage up to two and a half years forward.

The white premium represents the difference between the price of raw and refined sugar, and serves as a proxy for the cost of refining raw sugar. If the white premium is more than refiners’ costs, they may make a profit; if it is below their costs, they may lose money on each ton of sugar they process. The extension of the futures curve will assist market participants who are directly impacted by the premium, to help them to manage risk further into the future, facilitate price discovery and capture new trading opportunities.

ICE is at the center of global trading in soft commodities, offering a suite of products from London Cocoa and Robusta Coffee to Cotton, Frozen Orange Juice Concentrate and Arabica Coffee. More broadly, commodity markets influence almost every aspect of our daily lives: from car fuel to grocery stores, commodities prices impact the global economy at every level.


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Ask the Analyst: White Premium; What Is It and How Is It Calculated? | Czapp)

History of Sugar | The Sugar Association

Source: Duncan, Richard, editor. “Soft commodities and the London Fox.” Agricultural Futures and Options: A guide to using North American and European Markets. Woodhead Publishing Ltd, 1992, pp. 85-92.

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