Thai raw sugar premiums slipped to their weakest in two months, while whites were under pressure as consumers waited for India to start selling more sweetener following a surplus, dealers said on Wednesday. India, the world's biggest producer after Brazil, has allowed exports of 500,000 tonnes of sugar under Open General Licence and may consider additional unrestricted exports, but shipments have yet to start.
Thai raws were traded recently at 50 points above New York's May contract, with offers at 30 points premiums, their lowest since February. Bids were much lower at 10 points, which would be the weakest level since mid-2009. Thai raw sugar premiums were quoted at 115 to 125 points last week. There were no reports of deals for Thai white sugar, which is competing with refined sugar from India.
"So far, we haven't heard any offers for Indian raw sugar, but Thai sugar is available. The problem is buyers only want to buy it at 10 points premiums," said a dealer in Jakarta, referring to a level last seen in mid-2009. "Thai whites are being offered at $70 to $75 premium over London's August contract, but people think that's expensive."
India began offering white sugar in the physical market since late last year as local dealers resold some of the sweetener bought the previous year, in anticipation of a surplus. The sweetener was being offered at a premium of $40 to London white sugar futures, steady from last week, and much cheaper than Thai origin.
London August white sugar finished down $6 at $633.10 per tonne on Tuesday. ICE May raw sugar contract fell 0.13 cent to end at 24.94 cents per lb on expectations of ample output in Brazil and Thailand as well as exports from India.
There were no offers yet for sugar to be sold under the Open General Licence scheme, but Thai premiums were under pressure from the prospect of more sales from India and an upward revision in Thai crop. Thailand, the world's second-biggest sugar exporter after Brazil, expects a record output of 9.0 million tonnes in the current 2010/11 crop, up 30 percent from the previous crop after an increase in planting areas led to higher-than-expected cane production.
WEEK AHEAD The physical turned their attention to Indonesia, which plans to import more than 200,000 tonnes of sugar but there were still no inquiries. Indonesia, Southeast Asia's largest sugar consumer, will import 226,000 tonnes of raw sugar from May until the end of 2011 to fill idle milling capacity during the crushing season.
"The market is basically dead right now. Everyone is waiting for the Indian sugar from the OGL scheme to come into the market," said a dealer in Singapore. In late 2010, Indonesia issued permits for 450,000 tonnes of white sugar to be imported but, according to the Trade Ministry, as of March 31 only 56,345 tonnes had come in. The shipment included Indian white sugar.
Comments
Comments are closed for this article.