Raw and refined sugar, across producing and consuming markets.
Sourced from established producing regions and delivered into consuming markets in Africa, Asia and the Middle East.
One of the oldest traded commodities in the world.
Sugar is one of the oldest traded commodities in the world. Sugarcane was domesticated in New Guinea some ten thousand years ago and carried westward through India, Persia and the Mediterranean over the following millennia; sugar beet emerged as a temperate alternative only in the late eighteenth century, when European access to cane was interrupted.
Today roughly four-fifths of the world's sugar comes from cane and the balance from beet. Cane is grown across the tropics and subtropics — Brazil, India and Thailand are the principal producers — while beet is cultivated in the temperate zones of Europe, Russia and North America. Chemically the end product is identical: refined sucrose from a cane mill and a beet factory are indistinguishable.
What separates them commercially is the route to market. Beet sugar is generally refined at source and sold into its domestic region. Cane sugar is more often exported in raw form, refined near the point of consumption, and traded internationally at every stage.
One of the oldest traded commodities in the world.
From the field to the crystal.
At the Mill
Cane deteriorates rapidly once cut, so mills are built beside the fields they serve. Cane is washed, shredded and crushed to extract the juice. The juice is clarified to remove impurities, concentrated by evaporation, and crystallised. The crystal mass is spun in a centrifuge and dried, yielding golden raw sugar for shipment. The fibrous residue, bagasse, is burned to power the mill — most cane mills generate their own electricity and many export the surplus.
At the Refinery
Raw sugar is melted, filtered and treated to remove colour and remaining impurities, then re-crystallised into refined white sugar. Refineries are frequently located in consuming markets rather than producing ones, which is why raw sugar moves in bulk across oceans and refined sugar moves shorter distances in smaller parcels.
By-products
Molasses, the syrup remaining after crystallisation, is processed into ethanol, animal feed and yeast. In Brazil, where mills can switch between sugar and ethanol production according to relative prices, that flexibility is itself a driver of the global sugar balance.
Graded by colour, measured on the ICUMSA scale.
Sugar is graded by colour, measured on the ICUMSA scale — the International Commission for Uniform Methods of Sugar Analysis. A lower number indicates a whiter, purer product.
Raw sugar for refining typically falls between ICUMSA 600 and 1200 and is traded as VHP, or very high polarisation, referring to its sucrose content. Refined white sugar for direct consumption is ICUMSA 45. The grades between them serve industrial users whose specifications do not require full refining.
Raw and white sugar behave differently.
The raw and white sugar markets behave differently, and understanding that difference is central to trading either.
Raw sugar is a concentrated market. Brazil is both the largest producer and by some margin the largest exporter, shipping principally to Asia, which is the world's biggest consuming region, and in significant volume to Africa and the Middle East. A relatively small number of origins supply a large number of destinations.
White sugar is more widely distributed. Production and export capacity is spread across Asia — India and Thailand foremost — as well as Brazil and Europe, and demand is fragmented across a far larger number of importing countries. Africa is among the largest consuming regions for refined sugar.
The two markets are linked by the white premium: the spread between refined and raw prices, which represents the return available to a refiner. When that premium widens, refining capacity is drawn into the market and raw demand strengthens. When it narrows, refiners slow down. It is one of the more informative signals in the physical sugar trade, and our desk watches it closely.
Two futures markets provide the pricing framework.
Two international futures markets provide the pricing framework: a raw sugar contract quoted in US cents per pound and a white sugar contract quoted in US dollars per tonne. Physical trades are priced at a differential to one or the other, reflecting origin, quality, delivery period and freight.
Because both contracts are liquid and publicly quoted, a counterparty buying sugar can see precisely what it is paying for the commodity and what it is paying for everything else.
Sugar — Key Facts
c. 8000 BC — Approximately when sugarcane was first domesticated, in New Guinea.
Four-fifths — The share of world sugar produced from cane, with beet accounting for the balance.
The full spectrum — raw and refined.
Sugar is the foundation of our business. We trade the full spectrum — raw and refined — sourcing from principal producing regions and delivering where supply is needed on a continuous basis. Positions are priced against recognised international references, giving counterparties transparent, market-referenced pricing.
Products
Raw sugar (VHP, ICUMSA 600–1200) · Refined white sugar (ICUMSA 45)
Origins
Latin America · Africa · selected Asian origins
Destination markets
Africa · Asia · Middle East
Pricing
Referenced to international raw and white sugar futures
Contract standards
Concluded on the standard forms of The Sugar Association of London and The Refined Sugar Association
Delivery terms
FOB · CFR · CIF, bulk and bagged
Inspection
Independent inspection at load and discharge as standard
Counterparties
Sovereign reserve agencies · refiners · processors · distributors
Our market reading, applied to pricing.
Our sugar desk tracks producing-region output, freight markets, and consuming-market demand. That reading informs pricing and the management of price and physical risk on each trade.
- Products
- Refined white sugar (ICUMSA 45)
- Quality
- Refined, sulphitation or carbonation process; specifications to international standards
- Pricing
- Referenced to international white sugar futures and benchmarks
- Origins
- Latin America · Africa · selected Asian origins
- Destination markets
- Africa · Asia · Middle East
- Delivery terms
- FOB · CFR · CIF, bulk and bagged
Discussing a sugar requirement?
Give us the volume, origin or destination, and delivery basis. We will respond with an initial indication.
Contact Our Desk
Speak to Our Sugar Desk.
Our sugar desk tracks producing-region output, freight markets, and consuming-market demand. That reading is applied directly to pricing, to positioning, and to risk.
Enquire — Sugar
Our desk works London business hours. Trade enquiries receive a prompt response.
Discussing a sugar requirement?
Give us the volume, origin or destination, and delivery basis. We will respond with an initial indication.
Contact Our Desk