2023 Pool Terms: Shared Pool

POOL SNAPSHOT

TERMS

Objective

The Shared Pool aims to secure the best price outcome by:

• maximising the US Quota system returns within the constraints of the customer requirements and ICE 16 liquidity
• maximising the regional premiums and other income received from all sugar sold
• minimising the costs of pricing and selling sugar, including the operating costs of QCS.

Minimum aggregate (Pool) tonnage

The only sugar in this pool is the US Quota allocation, which comprises any sugar exported by QCS to the US under certificates of quota eligibility. The US Quota allocation is the first priority for allocation of sugar.

Pricing Declaration Date

Not applicable as you receive a pro-rata share of the US Quota allocation.

Pricing Period

Pricing in this Pool will be undertaken from 1 May 2023 (or earlier if appropriate) until 30 June 2024.

Discretionary Ratio

1:2:2:1 (JUL:OCT:MAR:MAY)

Characteristics

The Shared Pool is a compulsory Pool.

This is a non-committed Pool.

Please also refer to your CSPA for more details on the Shared Pool.

Pool type

This is an ICE 16 Pool. The gross price element for this Pool is derived directly from the ICE 16 futures market, and converted from a USD to an AUD return.

Minimum tonnage

Your total compulsory allocation to this Pool is 2–5% of your Total GEI Estimate dependent upon the US Quota allocation. You receive a pro-rata share of the US Quota, regardless of your other pooling and pricing nominations.

Maximum tonnage

Your total compulsory allocation to this Pool is 2–5% of your Total GEI Estimate dependent upon the US Quota allocation. You receive a pro-rata share of the US Quota, regardless of your other pooling and pricing nominations.

Pricing decisions

QCS is responsible for pricing decisions for the tonnage in this Pool.

Fees, costs and deductions

As per your CSPA with Mackay Sugar.

Tools used

QCS will exercise discretion in determining the timing of pricing decisions and the types of risk management contracts used. These may include, but are not limited to: ICE 16 futures contracts and options, foreign exchange contracts and options, and raw sugar commodity swaps (both AUD and USD dominated).

Pool performance

The performance of this Pool is reviewed on a weekly basis, and the pool management strategy is refined as necessary, based on the results of the review.

All revenues and costs associated with this Pool are reported through the monthly management reporting process. The Pool will be managed in line with the Mackay Sugar Board-approved Risk Management Policy.

 Individual production risk

Tonnage allocated to this Pool (2–5% of your Total GEI Estimate) is considered Committed Sugar as soon as you nominate the total tonnage of GEI Sugar to be supplied to QCS. Committed Sugar must be supplied by you regardless of production variations.

Production and delivery risk rest with you, the grower.

Any sugar produced in a season by you is allocated to the Shared Pool first, before being allocated to any other Pools.

Definitions

The definitions in the pricing pool terms have specific meanings, and you should ensure you understand these meanings prior to making GEI marketing decisions. You can read a description of the definitions used in the pricing pool terms here.