2023 Pool Terms: Short Term Pool

POOL SNAPSHOT

TERMS

Objective

The Short Term Pool aims to achieve a price outcome reflective of the returns available in the market during the season, while also considering production risk, mill performance and storage constraints. QCS will exercise significant discretion in determining the timing of pricing decisions in the Short Term Pool.

Minimum aggregate (Pool) tonnage

Nil.

Pricing Declaration Date

If you are a participant in this Pool, all your unpriced in-season sugar (less USQ) is allocated to the Short Term Pool.

Pricing Period

Pricing in this Pool will be undertaken from 1 May 2023 until 30 June 2024.

Discretionary Ratio

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

Characteristics

The Short Term Pool is the QCS default in-season pricing mechanism. All your available In-Season GEI Sugar (less USQ) will be allocated to the Short Term Pool as the default option.

This is a non-committed Pool.

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

Pool type

This is an ICE 11 Pool. The gross price element for this Pool is derived directly from the ICE 11 futures market, and converted from a USD to an AUD return.

Minimum tonnage

There is no minimum tonnage per participant.

Maximum tonnage

Your total allocation to this Pool cannot exceed 100% of the total GEI Sugar that you nominate to supply to QCS for the 2023 Season, less any GEI Sugar that you have priced and committed by the start of the season.

Pricing decisions

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

Fees, costs and deductions

All costs and expenses directly associated with operating this Pool are included in the calculation of the gross pool price, including but not limited to: brokerage fees, interest costs, execution costs and margin calls. Any other costs and expenses associated with the operation of this Pool will be allocated in accordance with the Shared Pool terms.

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 11 futures contracts and options, foreign exchange contracts and options, and raw sugar commodity swaps (both AUD and USD dominated). Trading in and out of positions is allowed in this Pool.

Pool performance

The performance of this Pool is reviewed on a daily basis, and the pool management strategy is refined as necessary, based on the results of the review. The Pool will be managed in line with the QCS Trading and Price Risk Management Policy.

Individual production risk

Tonnage allocated to this Pool is considered non-committed. There remains a small risk with this Pool from an unexpected crop decline, which could result in the Short Term Pool being unexpectedly overpriced and/or oversold.

The costs or benefits from unwinding pricing and/or sales where the Short Term Pool is overpriced and/or oversold will be attributable proportionally to all participants in the Short Term Pool.

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.