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QSL: Market update week 21

Weekly Sugar Market Overview

Indicative ICE 11 Prices

SeasonAUD/MT*Weekly Change

* The ICE 11 contract is the world benchmark contract for raw sugar trading. These figures are indicative of available ICE 11 raw sugar prices as at the week ending 8 November 2021 and reflect the weighted average Australian Dollar/tonne price. The prices have been adjusted to include Over-the-Counter margin fees charged by banking institutions and so may differ from daily prices quoted by the ICE 11 Exchange or other marketers of Growers’ Economic Interest in Sugar. Values also do not account for any adjustments resulting from local Grower-Miller pricing arrangements. 

Raw Sugar prices

  • After a slow start and extremely low trading volumes, raw sugar prices started to gain momentum last week, led by US Dollar weakness and increasing energy prices. The March 2022 ICE 11 contract moved through the 40-day and 50-day moving averages with ease, reaching a weekly high of 19.99 USc/lb late in the session on Friday, before closing the week at 19.94 USc/lb.
  • Rising global energy prices continued to drive ethanol demand higher in Brazil as more motorists with flex-fuel vehicles opted for ethanol over gasoline at the pump. Spot ethanol parity is approximately 20.50 USc/lb, which should convince more mills to switch from sugar to ethanol production in the final stages of the season.
  •  After experiencing a massive bull run for more than a year, international freight rates are facing a sharp correction lower, possibly led by the lack of coal available in the market to be shipped. The cheaper freight rates are likely to provide support to the ICE 11 market as more buyers are encouraged to enter the sugar market.
  • The Commitment of Traders report dated 2 November revealed speculators slightly increased their position by 4000 lots. The specs now hold a net-long position of approximately 163,000 lots, which leaves them with plenty of space to continue to buy into the market, or sell off if they see fit.
  • Coming up this week: UNICA (Brazilian Sugarcane Industry Association) data for the second fortnight of October is set to be released this week. The ethanol/sugar mix will be closely monitored by the market.


  • The Australian Dollar (AUD) appeared to find a ceiling last week following its rapid rally above 75 US cents over the past month. It traded from its weekly high of 75.36 US cents on the Tuesday, down to its low of 73.60 US cents on Friday.
  • The November Reserve Bank of Australia (RBA) meeting concluded with the RBA finally altering their view on the need to raise interest rates early by stating,”(it is) plausible that a lift in the base rate could be appropriate in 2023″. The higher-than-expected Q3 CPI figures are likely the result behind the change in RBA perspective. However, markets still remain more hawkish, pricing in a hike in 2022.
  • As expected by markets, the USA’s Federal Open Market Committee (FOMC) announced its formal quantitative easing tapering of $US15 billion per month beginning in November through to June 2022. Markets are predicating the Fed could hike rates in mid-to-late 2022 depending on whether inflation proves to be transitory or not.
  • In a surprising move, the Bank of England (BOE) held rates unchanged at its historic low of 0.1% despite the market fully pricing in a 15-basis-point hike. The BOE is reportedly waiting to see further labour market data as well as how inflation tracks before making a move. The GB Pound fell 1.4% on the news, with the Aussie and New Zealand Dollars also falling 0.8% and 0.6% respectively.
  • Concerningly, another wave of COVID-19 appears to be accelerating across China, which has now experienced more than 600 community cases in over half of its 31 provinces.


This is a whole-of-season ICE 11 price chart for the 2021 Season, current as of 9 November 2021, based on the current 5:1 pricing ratio applicable to QSL Target Price Contract growers. Source: Bloomberg

This report contains information of a general or summary nature. While all care is taken in the preparation of this report, the reliability, accuracy or completeness of the information provided in the document is not guaranteed. The update on marketing and pricing activity does not constitute financial, investment advice. You should seek your own financial advice. Nothing contained in this report should be relied upon as a representation as to future matters. Information about past performance is not an indication of future performance. QSL does not accept any responsibility to any person for the decisions and actions taken by that person with respect to any of the information contained in this report.

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