This is a brief summary of the reading I have been doing around the LIFFE White Sugar contract. I’m not looking to trade it as yet and if I eventually do, it will be via D4F. I’d be interested in others comments, particularly in relation to anything vital that I may have missed 
Background Information
Earliest records of sugar cane use come from China and date to 326BC. The world demand for sugar was very much involved in shaping the the modern world from the 1640s onwards as slaves were used to cultivate it in the US and South America.
There are two main sources of commercial sugar crops. Cane sugar (grown in tropical areas) and beet sugar grown in the colder areas. There is no difference in the final processed products of beet and cane in terms of taste, although beet sugar tends to be more regular in granule size. The big sugar producing countries are EU, Brazil, India, Australia, US Thailand and China.
Average per capita sugar consumption is 20.4 kg per person a figure that has remained stable for the last 20 years.
A chart of the weekly LIFFE sugar prices
Current LIFFE Sugar daily Price Chart
Details of the Futures Contract
Contract Size – 50 tonnes
Minimum tick - 0.10
Tick value - $0.10 per tonne/ $5 per contract
Margins - $605.5 per contract (day) $1211 overnight
Trading hours – Traded 09-45 to 17-30 London time.
Contracts, March, May, August, October, December
Typical spread (near month)– $0.3
Typical price movement.
Varies a lot but seems to average around 0.2-0.5 so not a killer in terms of how fast it moves.
Spreadbetting
Offered between 9-45 and 17-30 Monday to Friday.
Spread 1.2
£1 per 0.1 price movement.
Price charts on D4F are fairly reasonable.
Summary
A very liquid contract with nice steady movement and good trends.
Further Reading:
http://www.futuresource.com/charts/charts.asp?sym=LSBQ03
http://www.liffe-commodities.com/commodityfutures.aspx?targ=XW/F.LI
http://www.sucden.co.uk/sugar2.html
Background Information
Earliest records of sugar cane use come from China and date to 326BC. The world demand for sugar was very much involved in shaping the the modern world from the 1640s onwards as slaves were used to cultivate it in the US and South America.
There are two main sources of commercial sugar crops. Cane sugar (grown in tropical areas) and beet sugar grown in the colder areas. There is no difference in the final processed products of beet and cane in terms of taste, although beet sugar tends to be more regular in granule size. The big sugar producing countries are EU, Brazil, India, Australia, US Thailand and China.
Average per capita sugar consumption is 20.4 kg per person a figure that has remained stable for the last 20 years.
A chart of the weekly LIFFE sugar prices
Current LIFFE Sugar daily Price Chart
Details of the Futures Contract
Contract Size – 50 tonnes
Minimum tick - 0.10
Tick value - $0.10 per tonne/ $5 per contract
Margins - $605.5 per contract (day) $1211 overnight
Trading hours – Traded 09-45 to 17-30 London time.
Contracts, March, May, August, October, December
Typical spread (near month)– $0.3
Typical price movement.
Varies a lot but seems to average around 0.2-0.5 so not a killer in terms of how fast it moves.
Spreadbetting
Offered between 9-45 and 17-30 Monday to Friday.
Spread 1.2
£1 per 0.1 price movement.
Price charts on D4F are fairly reasonable.
Summary
A very liquid contract with nice steady movement and good trends.
Further Reading:
http://www.futuresource.com/charts/charts.asp?sym=LSBQ03
http://www.liffe-commodities.com/commodityfutures.aspx?targ=XW/F.LI
http://www.sucden.co.uk/sugar2.html
