Optimize the Sugar Trading Lifecycle
Sugar Commodity Solutions That Works for You
The sugar commodity market can be impacted by several factors. Sugar is heavily subsidized and changing government policies impact trade. It is traded in different markets and traders, merchandisers and consumers all use different specifications. Sugar is traded as both raw and white sugar, and the pricing for each is different.
It is essential to manage, trade and arbitrage on and between these markets based on the difference between raw and white sugar prices. Marketers and traders will use speculative trading from time to time and producers and buyers of sugar will use futures markets for hedging and risk management.
iRely’s CTRM for sugar includes specific functionality to manage sugar trades efficiently and effectively.
Our Sugar Trading Expertise
iRely’s Commodity Management System is customized to ensure sugar marketers, traders, producers and buyers effectively trade the price, quality and quantity sugar they require.
Pricing
Price allocation
Sugar often trades at prices to be fixed, making it very important for position screens to show the ‘to be price-fixed’ positions as well as overall position.
Sugar traders often use deposit payment terms to minimize counterparty credit issues. These can be extremely complex, including percentage or lump sum deposit requirements expressed in the payment terms for a trade or purchase/sale. These complex payment terms need to be captured.
Logistics
White sugar is usually containerized, and raw sugar can be traded in bulk. Your CM system must handle both. For white sugar, containers need to be tracked and deliveries may be made up of single or multiple containers whose movements need to be managed. Bulk raw sugar requires managing loading times and vessel size.
Polarization
The clearer the sugar crystals, the less it costs to convert raw sugar into white sugar. Therefore, polarization is a quality item expressed in the contract and measured using laboratory testing. This premium must be tracked by the system and used in calculations and cost accruals to gain an accurate picture of profit and loss.
iRely Sugar CTRM Benefits
iRely is a market leader in providing sugar software solutions.
- Manage refined and raw sugar, sugarcane, and sugar beets in one system
- Produce position reports for derivatives positions, unfixed contracts, and fixed contracts and split per trade month and by product or by supplier
- Assign, expire and exercise derivatives on one screen
- Monitor quality, allocation, logistics and invoices on one screen
- Automatically reconcile open trade equity and cash balances to broker statements