When ordering sugar, the price depends on many factors. I will list them in the order of importance:
1.) Current / forecasted sugar supply and demand is the most important factor. In the past (years 1625 - 1750) sugar prices have been as high or sometimes higher than equal weight in gold. Luckily those days are far behind us now. General sugar output trend is getting higher every year. That does not necessarily mean the prices will go down though because in recent years sugar has found it’s use in the ethanol production (for biofuels).
2.) Quantity is the next most important factor. Minimum quantity which I will supply starts at 12.500 metric tons. The maximum is capped only by the yearly production of the target country. Sugar is often pre-sold way in advance. In such cases I can still get it, I just have to negotiate a price with those who bought the production in advance. In the past I have worked on absurd orders for quantities such as 25 million tons of refined white sugar per year on a 5 year contract.
3.) Quality of the Sugar is the next on the price deciding factors list. Today sugar is made either of Sugar Cane or Sugar Beet. The main sugar types, sorted by quality (icumsa international rating system) are:
- Icumsa 45 (white, refined, granulated sugar - highest quality)
- icumsa 100 - 150 (extra special crystal sugar)
- icumsa 230 max (special crystal sugar)
- icumsa 600 - 800 (consumable raw sugar)
- icumsa 2000 ( raw sugar)
- icumsa 1600 max (raw sugar with higher moisture, ash content and lower polarization)
- icumsa 4600 max (very raw sugar)
4.) Location and source of the sugar are next on the price deciding factors list. The most popular export countries are Brazil, India and Thailand. The prices vary from country to country and from supplier to supplier. Most good sourcing agents have access to multiple (if not all) suppliers and can thus negotiate the best possible price for every project.
5.) Delivery methods by that I mean chosing the right shipping line, destination port accessibility, daily unloading capacity, etc.. can have a big impact on the final price. The difference in shipping cost can be double or even tripple from port to port, shipping line to shipping line.
6.) Broker chains. Each buyer eventually runs into an agent (like me) who is able to get the required type of sugar in required amounts under required terms, secure a better, handle the negotiations, paperwork, provide guidelines for the entire procedure, etc. On the other side there are suppliers who each have their own selling agents. In a perfect situation the buyer’s agent (me) and the seller’s agent come together and finalize the sale. It usually shouldn’t matter but often (like in my case) the buyer’s agent and the seller’s agent can be the same person. The seller usually pays comission to all parties involved (the comission is shared by buyer’s and seller’s agents). That comission is already a part of the final price which the buyer pays. Then there are independent brokers who find good opportunities on both buyer and seller side. They combine the buyer who is willing to buy at the highest price with the seller who is willing to sell at the lowest price. The difference can sometimes be the broker’s proffit, although good sellers usually refuse to pay out abnormally high comissions. There can be several brokers who offer the deal to eachother, and each of them is then involved in the final sale. That is called a “broker chain”. Neither seller nor buyer like those. Some accept them, some don’t.
Example sugar prices
I have been working with five direct sources of ICUMSA 45 for several years. None of them will ever even consider giving me a document outlining all their prices to send around in the internet. NEVER!
Unfortunately, sellers who have real product do not provide a price sheet like this one which I am listing below. Every order is different, and must be treated as such. Buyers and sellers of product who have invested millions and billions of their money to do this business will not provide a price sheet like this so people (brokers, traders) can go sell like if it was candy.
Below are some examples which were valid in beginning of May, 2008:
These were taken from some of my actual work, and the comission is already included. Note that these prices are not in container loads, they are in ship loads. Price examples are CIF (cost, insurance and freight included) from Brazil to Any Safe (non US sanctioned) World Port:
12.500 metric tons per month (for 12 months contract – total 150.000 MT): please email for a quote
25.000 metric tons per month (for 12 months contract – total 300.000 MT): $175 USD / MT
50.000 metric tons per month (for 12 months contract – total 600.000 MT): please email for a quote
75.000 metric tons per month (for 12 months contract – total 900.000 MT): please email for a quote
125.000 metric tons per month (for 12 months contract – total 1.500.000 MT): $230 USD / MT
300.000 metric tons per month (for 12 months contract – total 3.600.000 MT): $210 USD / MT
5.000.000 metric tons (one time order, split into 12 deliveries): $190 USD / MT
20.000.000 metric tons (one time order, split into multiple deliveries over time): $185 / MT
50.000.000 metric tons (one time order, split into multiple deliveries over time): $160 / MT (For May 2008, this is the best offer in today’s world.)
We also do “spot” orders (one time order / no long term contract):
12.500 metric tons (spot order) - please email for a quote
25.000 metric tons (spot order) - please email for a quote
50.000 metric tons (spot order) - please email for a quote
When the buyer commits to a longer term order, the price can be adjusted to the total quantity and is thus lower than a spot order.
Remember, sugar is a commodity and as such it depends on the market movement (on a daily basis) it also heavily depends on oil prices. The prices listed above are approximate examples of my past performance.
If you have any questions, or need a soft price quote, please contact me.