New York – After October futures contract expiry at the Intercontinental Exchange (ICE) last week, a significant portion of the record physical sugar delivery is poised to make its way to China, as stated by two traders familiar to the transactions, reported Reuters.
Wilmar International, the Singapore-based food trader that opted to acquire nearly the entire record 2.87 million metric tonnes delivery, has closed deals to sell between 1 million and 1.5 million tonnes to China, according to the traders.
The physical delivery of sugar after the October contract last week marked a historic milestone, being the largest delivery for any contract year since the inception of raw sugar futures trading in New York – the global reference point for sugar prices – back in 1914. Notably, the entire 2.87 million tonnes of sugar originating from Brazil, is set to be loaded from Brazilian ports spanning early October to December 15. The magnitude of this delivery is sufficient to fill approximately 45 Panamax-size vessels.
“We think Wilmar has already sold most, or even all, of that volume,” stated the first trader. “And China bought around 1.2 to 1.5 million tonnes,” the trader was quoted as saying by Reuters.
The second trader estimated Wilmar’s sugar sales to China at around 1 million tons. “They sold it at a lower price to secure a substantial volume,” he explained, indicating that the Singapore-based trader is likely to profit significantly due to the sheer scale of the transaction.
