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QSL: Market update week 5

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 19 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

  • The Oct21 ICE 11 raw sugar contract bounced off a low of 16.73 USc/lb last Tuesday before trading up over 100 points to a high of 17.78 USc/lb on Friday, closing last week up 2.5%.
  • Brazilian crop progress for the second half of June was released by UNICA (the Brazilian Sugarcane Industry Association) last Monday, with cane crush figures coming in above expectations due to quality production weeks in the Sao Paulo state. Cane harvested this season to date was reported to be 210.9 million tonnes compared to 230.4 million tonnes at the same time last year, with sugar produced at 12.3 million tonnes compared to 13.3 million tonnes in 2020. Despite Brazil’s cane and sugar production lagging last season by approximately 8%, the area harvested is actually 2.5% ahead, implying their crushing season will likely end relatively early. 
  • More cool weather is predicted for Brazil, spooking the market with fears of another frost that could damage the crop further. Longer term, the US Climate Prediction Center has reported that a La Nina pattern may appear again later this year, potentially bringing another year of poor rainfall for the Southern Brazil cane areas. 
  • The Indian Sugar Millers Association released its first estimate of the 2021/22 Season Indian crop at a forecast 31 million tonnes of sugar. This is virtually the same as their 2020/21 Season production but still lower than the market consensus.  
  • Just as ICE 11 sugar prices have been range bound for the past two months, the net speculator position has followed a very similar pattern, trapped in a 185,000 – 250,000 lot net-long position. The latest Commitment of Traders report dated 13 July reported specs reduced their position to 194,000 lots net long. 


  • Markets continued to trade in a risk-off tone last week as the US Dollar strengthened and the Aussie Dollar (AUD) underperformed after the extended Sydney lockdown was expanded to Melbourne. The AUD slipped from its high of 75.83 US cents last Tuesday down to a low on Friday of 73.92 US cents. 
  • For the third month in a row, the US consumer price index (CPI) was much higher than expected, printing at 0.9% month on month – more than double the market consensus. Almost half of this figure can be attributed to a 10.5% month-on-month increase in used car prices which are now statistically 45% higher than at this point last year. Despite the US Fed continuously reassuring that this inflation is only transitory and is expected, markets remain fearful that it could be more enduring and lead to an earlier interest rate hike. 
  • Domestically, the unemployment rate has fallen to levels not seen since December 2010, dropping from 5.1% to 4.9%. Despite the positive surprise, the numbers were hardly market-moving, as investors remain focused internationally. 


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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