Thai sugar premiums soften on crushing

Thai raw sugar premiums weakened this week as crushing accelerated and recent gains in New York futures scared off consumers, while a firming rupee pushed up prices of Indian whites, dealers said on Tuesday. About 33 million tonnes of cane have been crushed since the season started in mid-November in Thailand, with around 2.3 million tonnes of raws and around 913,000 tonnes of whites produced so far, they said.
Premiums for Thai high polarisation or hipol raw sugar for January-March fell to 85 points to New York's March contract from 100 points last week. Crushing in the world's second-largest exporter after Brazil lasts through April. "There's a bit of inquiries here and there, but nothing much is going on," said a physical dealer in Singapore, adding that consumers also waited for New York futures to resume trading on Tuesday after a public holiday.
White sugar premiums slipped to $35 to $40 a tonne from $45 to $50 a tonne above London's March contract, which settled $3.40 higher at $625.50 a tonne in directionless trade on Monday. On Friday, the March raw sugar contract on ICE rose 57 cents, or 2.5 percent, to finish at 23.84 cents a pound. Thailand is expected to see a record 2011/12 sugar output of 9.9 million tonnes and export 7.5 million tonnes in 2012 despite the country's worst floods in at least 50 years.
Thai premiums were also pressured by the prospect of more sales by main consumer India, which has allowed 1 million tonnes of exports in the current season to reduce excess stocks. "The Indian government says they will do a second tranche of 1 million tonnes, but the uptake of the first 1 million tonnes has been very slow," said another dealer in Singapore.
"$575 was reported traded for Indians last week," said the dealer, referring to white sugar from the sub-continent. India may soon consider easing curbs on the sugar sector, the chief of a top trade body said on Monday, after lobbying the finance minister on lifting controls that many say force the country into a damaging cycle of boom and shortages.