WHITE SUGAR IN CONTANGO White sugar has been in contango for several months and the spot month still remains at a healthy premium. There are several reasons cited. During the pandemic when transport was slow, difficult and expensive many end-users destocked. This was, predominately, refined sugar. As the pandemic waned there was a need to restock but the availability was tight. Timing, political and other local issues plus rocketing refining costs meant refiners struggled to meet demand although white sugar production is now being cranked up and looks likely the market will become more balanced during the second half of next year.


Currently, a large rally has seen prices in NY surge over 200 points and to their highest level since June as the funds have reversed a short position and have bought afresh mainly on macro and technical considerations. This has enabled Indian exports to price at levels they could only dream of less than a month ago. The spot month is at heavy premium to the rest of the board suggesting physical tightness but there is ample time for the situation to alleviate before the next expiry.


Uncertainty continues to stalk the markets. The Russian/ Ukraine war rumbles on. A global recession beckons. However, recent US data suggests the Fed’s ruthless interest rate policy may be having the desired impact on inflation. Time will tell but, perhaps, 2023 will be a kinder year.


Howard Jenkins E: howard.jenkins@admisi.com T: +44(0) 20 7716 8598


11 | ADMISI - The Ghost In The Machine | Q3 Edition 2022


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