CONTAINERISED WHITE SUGAR FUTURES - ICE · PDF fileKEY TRADING CONTRACT TERMS Containerised...
Transcript of CONTAINERISED WHITE SUGAR FUTURES - ICE · PDF fileKEY TRADING CONTRACT TERMS Containerised...
CONTAINERISED WHITE SUGAR FUTURES TRADING BEGINS JUNE 20, 2016
Developments in the physical market for white sugar exports have stimulated requests for the exploration of containerised delivery procedures as an alternative to the existing break bulk delivered futures. Since the acquisition of the former Liffe softs markets, ICE has been working with the trade and industry to develop a container delivery mechanism for futures contracts.
WHY IS A CONTAINERISED CONTRACT NEEDED?
• Industry estimates of the total exports of refined sugar in containers range from
60-80%
• Consumption trending towards purchases in container increments – limited demand
for full vessels
• Many commercially relevant ports (both at origin and destination) have concentrated
logistics investments to accommodate container shipping
• Smaller dry-bulk vessel fleet is shrinking globally, especially relative to container
freight availability
• Containers offer expedited loading and minimize weather-related delays
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Estimated shipments from the top five
Exchange-delivered origins
APPROXIMATELY TWO-THIRDS OF EXCHANGE QUALITY REFINED SUGAR EXPORTS ARE SHIPPED IN CONTAINERS
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KEY TRADING CONTRACT TERMS
Containerised White Sugar futures will trade alongside the benchmark White Sugar futures contract, with identical quality standards for the underlying deliverable supply.
ALL OF THESE TERMS ARE IDENTICAL TO THE EXISTING WHITE SUGAR CONTRACT
DELIVERABLE SUGAR
White beet or cane crystal sugar or refined sugar of the current crop at the time of loading
QUALITY PARAMETERS Minimum polarisation: 99.8 degrees Maximum moisture: 0.06 per cent Maximum colour: 45 ICUMSA
CONTRACT SIZE Fifty Tonnes
TICK SIZE 10 cents per tonne ($5 per lot)
TRADING MONTHS
March May August October December
FIRST NOTICE DAY Fifteen (15) calendar days prior to the delivery month
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KEY CONTRACT TERMS THAT ARE DIFFERENT
The key differences between the containerised and conventional futures contracts are the delivery terms and the list of eligible ports
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CONTRACT White Sugar Futures Containerised White Sugar Futures
DELIVERY TERMS
Delivered free on board and stowed in break bulk vessels in accordance with Rule 7 of RSA Rules relating to contracts
Delivered free on board in ISO Containers at a Container Port in accordance Rule 7 of RSA Rules relating to contracts
ELIGIBLE PORTS 94 ports in 43 Countries 20 ports in 17 Countries
INVOICE QUANTITY Contract Weight (50 MT) Net Shipped Weights
CONTAINER PORT LIST
EUROPE MIDDLE EAST, AFRICA, SOUTH ASIA
SOUTH-EAST ASIA
Antwerp, Belgium
Le Havre, France
Hamburg, Germany
Rotterdam, Netherlands
Gdynia-Gdansk, Poland
Felixstowe, UK
Mundra, India
Durban, South Africa
Jeddah, Saudi Arabia
Jebel Ali, UAE
Penang, Malaysia
Port Kelang, Malaysia
Bangkok, Thailand
Laemchabang, Thailand
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Buenos Aires, Argentina
Paranagua, Brazil
Santos, Brazil
Buenaventura, Colombia
Acajutla, El Salvador
Puerto Quetzal, Guatemala
AMERICAS
BU
YER
BUYERS NOMINATION (T-14)
BUYER ASSIGNS SUPERVISOR CONTAINERS LOADED OVER RAIL
Seller notifies buyer of loading location to allow buyer to secure supervision
SELLER IDENTIFIES LOADING LOCATION (T-13)
Seller collects the empty containers from the container yard and transports them to the stuffing location
Suitable containers are stuffed after lining the floors and walls with kraft paper
Costs and labour are for the account of the seller
COLLECTION AND STUFFING CONTAINERS RETURNED TO YARD PAYMENT BASED ON B.O.L.
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Buyer books container freight and submits nomination in the form of the booking reference 14 days prior to delivery
Buyer has the right to assign a supervisor to jointly oversee the stuffing
Seller returns sealed containers to the yard by the terminal stack closing date
Risk passes to the buyer
DELIVERY TIMELINES S
ELL
ER
Shipping line loads container onto the vessel.
Costs associated with delays or substitutions for the account of the buyer
Shipping Line generates B.O.L.
Documents presented to the Exchange
Payment processed, title transferred and margin returned
NOTICE DAY
Seller’s Delivery Notices submitted to Exchange and Clearing House
BUYER AND SELLER DELIVERY RESPONSIBILITIES
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To account for the complexities of delivering sugar in containers at the Seller’s choice of location, the Containerised White Sugar Futures contract has adopted several terms to facilitate efficient deliveries and mitigate risks to the counterparties.
PROTECTIONS FOR BUYERS AND SELLERS
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• Alignment with and reference to RSA Rules for FOB contracts for shipment by containers, a standard and well understood industry standard
• Curated initial port list to ensure contract performance and market confidence – history of unobstructed container deliveries
– expansive list of destination ports served by the shipping lines
– highly liquid container freight market
• Controls on Loading rates that can be requested and required – Buyer must make containers available in sufficient time to allow loading, and sellers may
require a full seven days
– Buyer may request to load any amount, but may only require ¼ of tender in one week
– Seller must be prepared to stuff and return to container yard ¼ of tender in any one week
• Minimum bookings (10 containers) to ensure cost efficiency deliveries
WHITE SUGAR VS. CONTAINERISED WHITE SUGAR FUTURES
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CONTRACT TERMS
CONTRACT SYMBOL W CS
CONTRACT SIZE Fifty Tonnes Fifty Tonnes
PRICE QUOTATION US Dollars and cents US Dollars and cents
CONTRACT LISTING March, May, August, October, December March, May, August, October, December
DELIVERY TERMS FOB and stowed in break bulk vessel FOB in ISO containers
DELIVERY POINTS 94 ports in 43 Countries 20 ports in 17 Countries
QUALITY STANDARDS
White beet or cane crystal sugar or refined sugar Current Crop at the time of loading free running of regular grain size and fair average of the quality of the crop Minimum polarisation: 99.8 degrees Maximum moisture: 0.06 per cent Maximum colour: 45 ICUMSA
White beet or cane crystal sugar or refined sugar Current Crop at the time of stuffing free running of regular grain size and fair average of the quality of the crop Minimum polarisation: 99.8 degrees Maximum moisture: 0.06 per cent Maximum colour: 45 ICUMSA
DELIVERABLE GROWTHS Sugar shall be delivered at a port in the country of origin of the sugar or customary port of export
Sugar shall be delivered at a port in the country of origin of the sugar or customary port of export
FIRST NOTICE DAY Fifteen (15) days before the delivery month Fifteen (15) days before the delivery month
LAST TRADING DAY Sixteen (16) days before the delivery month Sixteen (16) days before the delivery month
LAUNCH: JUNE 20, 2016* FIRST DELIVERY MONTH: OCT-16*
*Following the satisfactory completion of applicable regulatory processes
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AGRICULTURAL COMMODITIES
ICE became the center of global trading in soft commodities with its acquisition of the New York Board of Trade in 2007. Now known as ICE Futures U.S., the exchange offers futures and options on futures on soft commodities including coffee, cocoa, sugar, cotton and frozen concentrated orange juice. Sugar No. 11 is the benchmark contract for the global sugar market which is one of the world's ten largest agricultural futures markets.
ICE Futures Europe also offers leading softs markets including cocoa, Robusta coffee, white sugar and feed wheat futures and options providing a range of global soft commodity products on the ICE platform. ICE Futures Canada lists the leading canola futures contract, a popular oilseed.
WHY TRADE ON ICE? WHY TRADE ON ICE?
LEADING MARKET FOR COMMODITIES TRADING
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theice.com/agriculture
FURTHER INFORMATION
TIM BARRY TOBY BRANDON DAVID FARRELL MATT RYAN
Vice President,
Product Development
Intercontinental Exchange
+1 212 748 4096
Director,
Soft Commodity Operations
Intercontinental Exchange
+44 207 012 8798
Senior Director,
Global Soft Commodity Operations
Intercontinental Exchange
+1 212 748 4200
Senior Director,
Ags and Soft Commodities
Intercontinental Exchange
+1 212 748 4116
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