Asia Sugar,Thai raw premiums steady at 200 points

SINGAPORE: Premiums for Thai raw sugar were steady at their highest since early May on Thursday, but trade was thin as the market awaited a decision by the European Union on a duty free import quota dealers said on Thursday.

An EU committee will vote on Thursday on whether to open a duty-free import quota for 200,000 tonnes of raw or white sugar and decide on a proposal to hold fortnightly tenders from July until the end of September for imports.

Although trading houses started to make inquires, a lack of activity in the physical sector suggested that a rebound in New York sugar futures curbed interest.

"I think it's somewhat premature to assume Thai values will be supported by EU buying as it's not clear what they'll import and when," said a dealer in Singapore, who trades Thai sugar.

"With regards to premiums, I very much doubt anyone would be bidding Thai raws above 200 points based on EU demand."

Thai raw sugar was quoted at premiums of 200 points or 2.00 U.S. cents above New York's July contract , steady from last week, but dealers expected demand to appear at lower premiums.

The EU proposal to open a fresh import quota is designed to address a continued shortage of sugar supplies on the EU market, created in part by high world sugar prices limiting imports from the bloc's traditional African, Caribbean and Pacific suppliers.

ICE July raw sugar futures rallied 0.73 cent, or 3.3 percent, to end at 22.64 cents a lb on Wednesday, while August white sugar on Liffe jumped $24.90, or 4 percent, to close at $648 per tonne.

Thailand may sell more sugar to Europe if the EU approves the duty-free import quota, potentially lifting premiums despite a record output in the world's second-largest exporter after Brazil.

Copyright Reuters, 2011