Premiums for Thai raw sugar weakened this week after recent rises in New York futures spurred selling from producers, while Pakistan started to offer more samples after the government approved exports, dealers said on Tuesday.
Lower premiums attracted buying from consumers such as Indonesia, Japan, South Korea and also China, which is more or less covered for the first half of this year. Around 50,000 tonnes of Thai sugar will be shipped to China this week, dealers said.
Premiums for Thai high-polarisation, or hi-pol, raws for prompt shipment eased to between 30 and 50 points to New York's March contract from as high as 60 points last week. March raws were hardly changed at 24.64 cents/lb on Monday, having hit a high of 24.84 cents.
"The demand for raws is there. We have our own stuff going to China next month and also the following month, but they are quite well bought. We are seeing purchases by the state," said a physical dealer in Singapore. China will stockpile 1 million tonnes of white sugar from the domestic market for state reserves to stabilise domestic sugar prices and protect farmer interests, the country's top planning body said last week.
PHYSICAL MARKET DESERTED Premiums for Thai white sugar were unchanged at $15 to $20 a tonne to London's March contract, but the physical market was deserted ahead of its expiry on Tuesday. J-spec or low-quality Thai raw sugar favoured by Japanese consumers was offered at premiums of 15 to 20 points to New York's March contract, down from the 20 to 25 points premium last week.
Thailand, the world's second-biggest sugar exporter, shipped a record 6.68 million tonnes of the sweetener in 2011, up 51 percent from the previous year, due to a bumper crop and strong demand, a senior official said on Tuesday. Indian white sugar, which competes with Thai sweetener, was steady at between $620 and $650 a tonne FOB even after New Delhi allowed a further 1 million tonnes of exports, to ease domestic supply.
"Indian sugar is very expensive because the rupee is still very strong. I've been offered Indian whites at $635. There's still demand from the Middle East and I heard Tanzania is buying a lot," said another dealer in Singapore. "Pakistan is offering samples but there's no date yet when it will start exporting sugar. The quality is surprisingly good."
Pakistan has approved the export of sugar for the first time in nearly three years, spurred by an expected surplus of more than 1 million tonnes. Pakistan was forced to import about 1.2 million tonnes of sugar in 2010 after production fell to 3.1 million tonnes from the 2009/10 crop year, when many farmers switched to more profitable crops.
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