White Sugar

Commodities (NYSE Liffe) - Product Background - White sugar

White Sugar Overview

The first recordings of sugar extraction came from West China in the early 1700's. Cultivation spread into Northern India, and then westwards along the trade routes. Eventually, Spaniards spread the cultivation of sugar across the Atlantic Ocean to the West Indies, the geographical region that is often thought of as the origin of sugar as it is known today.

Sugar was once deemed to be an exclusive product, originally consumed only by the wealthy. It is now recognized as an integral part of a staple diet world-wide.

Sugar originates from two distinctly different plants, cane and beet. The cane plant is a grass and grows in tropical climates, mainly in the southern hemisphere. The beet plant is a tuber and is grows in cooler climates, almost exclusively in the northern hemisphere. White sugar can be produced from both cane and beet - the only product difference is in its final appearance. White sugar from beet tends to be produced in slightly smaller and more uniform crystals than that from cane. There is no taste difference.

There are four stages in the production of white sugar from cane: juice extraction, purification, crystallization to raw sugar, and then refining. Cane by-products are bagasse, molasses, and filter presses. White sugar from beet has only three stages, as no raw sugar is produced. Beet by-products are beet pulp and beet molasses.

The quality of white sugar is measured on the ICUMSA scale (the International Commission of Uniform Methods of Sugar Analysis). This scale measures the purity of the sugar according to the reflection of light through the sugar crystals, with zero being the purest possible.

White Sugar Production, Trade, and Use

Over 150 million tonnes of sugar (raw value) is typically produced worldwide across some 120 coutries, with cane sugar accounting for 80% and beet 20% of output. This figure is variable and will depend on political and climatic changes, disease, and weather conditions. For example, world sugar production was 143 million tonnes in 2004 and 170 million tonnes in 2007.

The biggest producers of sugar (cane and beet) are Brazil, India, the EU, China, the USA, Thailand, Australia, Mexico and Russia. Of these, the main producers of white sugar from beet are the EU, the USA, Turkey,  Ukraine, and Russia. Raw and white sugar consumption continues to increase year on year, in line in particular with the growth rate of developing countries. The world's largest sugar consumers are India, the EU, China, Brazil, the USA, Russia, Pakistan, and Indonesia. The 10 largest consumers of sugar account for two thirds or world consumption.

World trade in raw sugar is around 47 million tonnes, of which white sugar around 17 million tonnes. The largest exporters of white sugar are Brazil, the, EU, India, and Thailand. The largest importers are the Gulf States, the Middle East, North Africa, Nigeria, and Indonesia.

Futures and Options Contract Information

On the international market there are various qualities of white sugar. NYSE Liffe’s White Sugar Futures Contract, launched in July 1983, has become the benchmark against which white sugar is traded. The basis of the contract is 45 ICUMSA white sugar, delivered Free on Board (FOB) in designated ports across the world.

The White Sugar Options contract was launched in September 1989.

In 2011, NYSE Liffe’s White Sugar Futures Contract traded 1.5 million lots. This represents 75  million tonnes of white sugar, over 4 times the volume of white sugar traded on the world market.

White Sugar futures and options have been traded electronically since November 27, 2000.

Futures and Options Market Users

Our white sugar contract is designed to meet the hedging requirements of the international sugar industry. It also allows for speculative investment in this historically price-volatile commodity.

The contract is actively used by the international sugar trade, as well as by sugar millers, refiners, and manufacturers who wish to actively manage their exposure to adverse price movements.

NYSE Liffe’s White Sugar Futures Contract also enjoys participation by managed futures funds, and both institutional and short-term investors.

For more information contact commodities@nyx.com.