Prior to the inauguration of trading in Refined Futures, Raw Sugar
Futures were used by many jobbers for hedging and protecting their
Refined requirements.
The theory of operation is that the raw price will be about equivalent
to the refined price after duty and the charge for refining are added.
While the Raw Sugar market will at times get out of line with refined,
both favorably and unfavorably, this cannot continue for any long
period.
When the Raw Futures market is favorably out of line, it may be more to
your advantage to use this market, rather than the Refined Futures
market. At the present time there is the added advantage that the
volume of trading is greater in Raw than in Refined.
When buying or selling Raw Sugar Futures, you may figure that the
variation on a minimum lot of 50 tons would be equivalent to the same
variation of 1120 bags or 320 barrels.
We give you below herewith details of contract and trading conditions:
All contracts for future delivery shall be for 50 tons of 2,240 pounds
each and multiples thereof.
CONTRACTS: Sold for ... to ..., 50 tons of 2,240 pounds each of sugar
in bags, deliverable from licensed warehouse in the port of New York,
between the first and last days of ... inclusive. The delivery within
such time to be at seller's option, upon 7, 8 or 9 days' notice to the
buyer. The sugar to be of any grade or grades of Raw sugars based on
Cuban Centrifugal of 96 degrees average polarization outturn at the
price of ... cents per pound in bond, net cash with additions or
deductions for other grades according to the rates of the New York
Coffee and Sugar Exchange, Inc., existing upon the afternoon of the day
previous to the date of notice of delivery, and shall embrace all
Centrifugals first running. The foreign sugars deliverable other than
Cuban Centrifugals, are: Centrifugals from British West Indies,
Demerara, Surinam, San Domingo, Brazil, Peru, Java, Mauritius,
Venezuela and Haiti, all basis of 96 degrees average polarization
outturn at .2512 cents per pound (difference in duty) less; but no lot
of 50 tons is to consist of sugar from more than one country of origin.
Allowances on Centrifugal sugars to be .03125 cents per pound per
degree above 96 degrees, up to 98 degrees and .0625 cents per pound per
degree below 96 degrees, down to 94 degrees and .09375 cents per pound
per degree below 94 degrees, down to 92 degrees, with fractional
degrees pro rata.