On January 26, 2016, Euronext announced that it will be launching a new Sugar commodities futures contract in the autumn of 2016, subject to regulatory approval. Aimed at all the actors of the European Union Sugar ecosystem, the contract will allow the industry to hedge its positions against price fluctuations and anticipate future price movements, just as the Sugar quotas expire in the European market.
The European Union is the third largest sugar producer and the second largest consumer in the world. Following a profound modification in its common organization of the markets in agricultural products, the EU will abolish sugar production quotas on September 30, 2017. This major reform follows those covering the oilseeds, grains and dairy sectors in the EU over the last two decades, which all resulted in the need for efficient price risk management tools. Within this context, the new sugar contract will allow the EU sugar sector to manage their risk more smoothly in a transparent, regulated and liquid market.
Data Sources: Euronext | Effective Date: October 03, 2016