Indonesian state plantation firm PTPN XI has bought 15,700 tonnes of white sugar from India and Thailand, the firm said on Monday. The white sugar will be delivered before April 15, and was bought through direct negotiations with traders, after a series of tenders failed to secure supplies.
"We got 5,200 tonnes at $760 a tonne from India and 10,500 tonnes at $769 a tonne from Thailand," Adig Suwandi, corporate secretary at PTPN XI, told Reuters. Importers have only bought about 65,000 tonnes so far this year, or 14 percent of a 450,000 tonnes of white sugar for household consumption permitted by the government before May to bridge an anticipated shortfall in production.
Indonesia revised down its expected white sugar production for this year by 31 percent because of a lack of expansion in cane plantations and stalled efforts to modernise ageing sugar mills, an agriculture ministry official said earlier this month.
Lower output from Indonesia, Southeast Asia's largest sugar consumer, means the country may have to import more white sugar to meet domestic demand. Thin supplies and a revival in demand pushed New York's May raw sugar contract on ICE Futures jumped 0.97 cents to end at 27.71 cents per lb on Friday. London's May white sugar futures soared $24.40 to close at $710.60 per tonne.
Indonesia was once the world's second largest sugar exporter after Cuba in the 1930s. But ageing sugar mills, a vast network of smallholders and an influx of cheaper imported sugar put pressure on local production. The archipelago of 17,000 islands now imports more than 2 million tonnes of sugar - both raw and white - to meet household and industrial consumption.
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