Raw sugar shipments from Thailand's larger than expected crop have been booked for Russia for April loading and May arrival, undercutting traditional origin Brazil, European trade sources said on Friday. Some European trade sources talked of around 200,000 tonnes of Thai sugar booked for Russia, but there was no official confirmation.
Thailand is an unusual origin for the Russian market. Brazil is the main supplier. Dealers said Thai sugars had not been supplied to Russia for several years, as Brazil was traditionally the most competitive origin for the Black Sea.
Thailand is the world's second-largest sugar exporter after Brazil. Trade sources quoted Thai raw sugar offered at 100-150 points over ICE May raw sugar futures and south Brazilian sugar at 200 points over May. ICE May raw sugar futures were down 0.06 cent or 0.23 percent to 26.44 cents a lb at 1025 GMT. One analyst said freight costs from Thailand to the Black Sea were similar to the cost from Brazil to the Black Sea, at around $40-45 per tonne.
Thailand is harvesting a larger than expected crop, which some brokers put at around 80-85 million tonnes of cane (some 8.7 million tonnes of sugar), well above previous forecasts for 70 million tonnes of cane or less. Some dealers say Thailand could produce its biggest ever cane crop.
Physical dealers that if Thai sugar undercut Brazilian supplies to Asian markets such as Indonesia and Malaysia, the strain on Brazilian port capacity will be less this year than last year. "It (big Thai crop) will take pressure off Brazil, but we still think there will be congestion issues in Brazil," one European trade source said.
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