SUGAR 11

ICE US Sugar No. 11

CONTRACT SPECIFICATION

Trading Screen Product Name ICE US Sugar No. 11
Commodity Code SBE
Contract Size 112 000 pounds/ lot
Price Quotation cent / pound
Trading Hours Monday - Friday
03:30 P.M - 01:00 A.M (the next day)
Minimum Price Fluctuation 0.01 cent / pound
Contract Series March, May, July, and October
Delivery Registration Day The fifth business day prior to the First Notice Day
First Notice Day First business day after last trading day.
Last Trading Day Last business day of the month preceding the delivery month
Margin As MXV required
Position Limit As MXV required
Price Limit
No requirements
Settlement Method Deliverable
Quality Standards Standards are detailed below

QUALITY STANDARDS

In accordance with the regulations of Sugar No. 11 traded on Intercontinental Exchange Futures United States (ICE US).

Product infomation

Sugar is one of the oldest commodities in the world, a basic and essential commodity, used directly in daily life, as well as an input material for the food industry, production. fuel.
Sugar can be produced from two main raw materials, sugar cane and sugar beet. In the past 10 years, sugar production activities have shifted towards cane sugar producing countries while the area of ​​sugar beet is increasingly shrinking.

Sugar value chain

Planting place

Sugarcane is grown mainly in tropical and subtropical areas, likes light and requires a lot of water. Sugarcane is an important sugar industrial crop of the sugar industry, normally the amount of sugar in cane ranges from 10% to 12%. Sugarcane is grown in many regions such as Asia, Latin America and Africa.
Sugar beet is an agricultural product grown mainly in temperate and cold regions such as Europe, the United States, and China. The amount of sugar in beets ranges from 14% to 18%.
(The situation of sugar production and consumption in the world is referred to in Figure 1).

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Figure 1: Sugar producing and consuming countries in the world

The area of ​​sugarcane growing areas in the world is currently at 274 million . In particular , the sugarcane material area in Brazil accounts for more than 40 % of the total area of ​​the world , thanks to favorable soil conditions for the development of raw cane , as well as the Government's policies to support and promote the sugar industry . Brazil . Followed by India , China , Thailand and Australia . These are all leading countries in world sugar production and export.
Sugar beet is grown mainly in Europe due to the favorable weather and soil for the cultivation and production of sugar beets. The total area is 51 million hectares. The countries with the largest sugar beet acreage are Russia ( 23 % ) , USA ( 10 % ) , Germany ( 8 % ) ( Refer to Figure 2 )

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Figure 2: Countries with great influence on the world sugar industry in the period 2005 – 2016

Import and export situation

Sugar is an important agricultural product traded worldwide. However, up to 71% of sugar is consumed in the producing country, so the world sugar trade is only about 60 million tons and 24 billion USD annually. Even the largest sugar producing countries in the world such as India ( - 14, 6 % of total output ) or China ( - 8 , 5 % ) , due to the large domestic demand, they have to net imports of sugar each year . Sugar can be exported as raw sugar or as refined sugar for direct production and consumption.
In MY 2017/18 , global sugar production increased by more than 20 million tons ( + 11.8 % yoy ) , reaching a record level of nearly 195 million tons ( according to USDA ) , from 27 million hectares of cane and 05 million hg of beets . . Global sugar consumption increased slightly , reaching more than 174 million tons ( + 1, 7 % yoy ) . Sugar is traded between 55 - 60 million tonnes per year ( - 30 % of production ) . Countries that have a larger demand for sugar than domestic production such as China, India, and Indonesia have to import sugar every year, depending on the supply of sugar from exporting countries such as Brazil and Thailand. (Refer to Figure 3)

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Figure 3: Sugar importing and exporting countries in the world

Factors affecting Sugar

* Health Conscious: Consuming a lot of sugar can lead to several diseases like diabetes, obesity, heart disease, tooth decay and others. The government is under pressure to tackle high obesity, so this could lead to the Government imposing taxes and restrictions on  products  with high sugar content. Health concerns can lead to reduced sugar consumption and lower sugar prices.
* Sugar supply: The sugarcane crop takes about 12-18 months to harvest. Farmers have to prepare the soil, seeds, irrigate and harvest the crop. When farmers find the climate favorable, they will plant more trees. Conversely, if the weather is unfavorable, farmers will plant less sugarcane.

* Demand for sugar: Emerging economies in Asia and South America are the biggest consumers of sugar. Therefore, the economic situation in these countries will positively or negatively affect sugar prices.
* Ethanol Demand: Sugar can be crushed and fueled to produce Ethanol. Ethanol is a fuel for biofuel production, which competes directly with gasoline.
* Subsidies and Tariffs: Government subsidies and tariffs distort the market by creating a high-priced supply and driving the price of sugar down. If the largest sugar producing countries stop subsidizing sugarcane farmers, sugar production could fall and sugar prices could rise.

* Brazilian real: Brazil is a producer and exporter of sugar in the world. Therefore, fluctuations in the real currency have a large impact on global sugar prices. When the real is weak, Brazilian farmers have an incentive to produce more sugar to export to other countries. When the real is strong, Brazilian farmers will tend to sell sugar in the local market
* US Dollar: Sugar, like other commodities, is affected by the US dollar.

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