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QSL: Market update week 4

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 12 July 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

  • Last week saw raw sugar prices give back all of the previous week’s gains, with the ICE 11 market trading lower each day. Following the US Independence Day holiday last Monday, the prompt Oct 21 contract opened the week at 18.35 USc/lb and closed at 17.28 USc/lb, inking a 5.83% loss for the week.
  • The market appeared to dismiss speculation around potential frost damage to the Brazilian crop. While we won’t know the extent of any damage for another week or so, the two-day frost covered less than 10% of cane area and most of this had already been harvested, so it looks likely to have little impact on Brazilian production. Weather forecasts are predicting a wetter-than-average August which could be bullish (positive) for sugar prices in the short term if harvesting is delayed or sucrose washed out. However, it may have longer-term negative impacts on prices as the ratoon cane for next season receives a much-needed boost. 
  • Corn, wheat and soybean prices were all significantly lower following an improvement in the weather forecast for the United States on Tuesday. Sugar prices were dragged lower by almost 40 points as soon as the grains market opened weaker.
  • In India, high ICE 11 raw sugar prices have made exporting sugar viable without the government subsidy. Market researchers estimate a record 6.15 million tonnes of sugar have been exported so far this season. It is expected up to 6.5 million tonnes could eventually be shipped, filling some of the lost supply from the poor Thai and Brazilian crops.
  • The latest Commitment of Traders report provides little insight into speculator behaviour as the market is now approximately 90 points lower on a live basis than the report date of 6 July 2021. A 222,000-lot net-long position was printed, but this is likely to be well under 200,000 today.


  • Risk-off sentiment dominated financial markets last week and forced the Australian Dollar down to a year-to-date low of 74.10 US cents on Friday, slipping from a high last Tuesday of 75.99 USc to close the week at 74.88 USc. 
  • An accumulation of factors rather than a single event appeared to drive the change in sentiment lower, with ongoing fear of the US Federal Reserve raising interest rates and the rapidly spreading Delta variant of COVID-19 being the two main influences. As countries such as the UK commit to fully reopening and ‘returning to normal’, financial markets are bracing for the worst and keeping a very close eye on daily case numbers and hospitalisations. 
  • Domestically, the Reserve Bank of Australia met last Tuesday for their July monthly meeting. This brought little news for the market, with interest rates left on hold. Governor Lowe remains focused on economic data rather than specific dates, and stated that while he acknowledges the improved economic conditions, wage growth and inflation targets must be met before any rates changes will occur. At this stage 2024 remains the target for the first hike.
  • West Texas Intermediary (WTI) oil prices skyrocketed to more than six-year highs of almost $US77/ barrel after a conflict between Saudi Arabia and the UAE blocked an oil supply increase. 
This is a whole-of-season ICE 11 price chart for the 2021 Season, based on the current 3:2:1 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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