Exclusive-China to receive most of record ICE sugar October delivery -traders
By Marcelo Teixeira
NEW YORK (Reuters) — Most of the record physical delivery of sugar by commodities traders at the expiration of the October futures contract at the Intercontinental Exchange (NYSE:ICE) last week will head to China, according to two traders with knowledge of the deals.
Wilmar International — the Singapore-based food trader that built a large long position and decided to take nearly all of the record delivery of 2.87 million metric tonnes — has closed deals to sell between 1 million and 1.5 million tonnes to China, they said.
According to the traders, who work for two of the largest players in the global sugar trade, Wilmar has also closed deals to send some of the sugar to Indonesia, Egypt and India.
Wilmar has not returned a Reuters request for comment.
The physical delivery of sugar at the expiry of the October contract last week was the largest of any contract, at any year, since raw sugar futures started to be traded in New York — the world's price benchmark for the sweetener — in 1914.
All of the 2.87 million tonnes of sugar is of Brazilian origin, to be loaded from Brazilian ports between early October to Dec. 15. The size of the delivery is enough to fill around 45 Panamax-size vessels.
«We think Wilmar has already sold most, or even all, of that volume,» said the first trader.
«And China bought around 1.2 to 1.5 million tonnes.»
The second trader estimated Wilmar' sales to China at around 1 million tons.
«They sold it cheaper to have a large book,» he said, indicating the Singapore-based trader will make a profit due to the very large volume.
The fresh Chinese buying comes days after the country decided to resume sales of its sugar reserves — the first time it does it since 2016 — as stocks
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