ICE Containerised White Sugar Futures
ICE’s White Sugar futures contract is used as the global benchmark for the pricing of refined sugar. Working closely with the sugar industry, ICE Futures Europe has developed a new physically delivered Containerised White Sugar futures contract to reflect advancements in the shipping methods for white sugar. The contract was introduced for trading on June 20, 2016, with the first listed contract month of October 2016.
Delivered in containers, rather than break-bulk vessels, the contract is closely aligned with global shipping procedures for refined sugar; and it will trade on the ICE trading platform and clear at ICE Clear Europe alongside the existing physically delivered White Sugar futures contract.
Why is a containerised contract needed?
Developments in the physical market for white sugar exports stimulated requests for the exploration of containerised delivery procedures as an alternative to the existing break bulk delivered futures.
- Industry estimates that container shipments have grown to be the majority share of global exports for white sugar
- End-user consumption is trending towards purchases in smaller container increments
- Many commercially relevant ports (both at origin and destination) have concentrated logistics investments to accommodate container shipping
- Containers offer expedited loading and minimize weather-related delays
Container Port List
Spread Trading
ICE will offer the ability to trade the spread between the new Containerised White Sugar contract and the existing White Sugar Futures contract as a “container premium”. A position in the inter-product spread market results in two separate positions in the underlying futures legs i.e. a long position in the Containerised White Sugar Futures and a short position in the White Sugar Futures.
Additionally, Block trades will be permitted on the Containerised White Sugar Futures contract as part of Sugar Arbitrage Transactions against ICE Futures U.S.’s Sugar No. 11 contract.
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In addition to the ICE Futures Europe white sugar offering, ICE Futures U.S. hosts the Sugar No. 11 contract, which allows for physical delivery of raw cane sugar at a variety of global delivery points, and the Sugar No. 16 contract, which allows for physical delivery of raw cane sugar within the U.S.
ICE has deep experience in developing contracts that serve the global sugar, cocoa and coffee industry from our North American and European markets.
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