Sugar premiums in Thailand, Asia's largest exporter of raw sugar, are likely to stay steady over the next week as local supply remains tight at the end of the harvest season, traders said on Monday.
Thai raw sugar premiums for July-September stood at 140 points over CSCE futures without bids. Last week, offers were at 150 points over without bids. "Thai sugar supply is pretty tight.
Most mills do not have much sugar for new sale," said one trader. Some of Thailand's 46 mills would continue to refine whites from raw in coming months, although mainly to fulfil existing export contracts, traders said.
An unusually prolonged and hot dry season caused Thailand's 2003/04 crop to drop 13 percent to 64.48 million tonnes from 74.07 million tonnes in the previous year.
The crop year runs from October to September, but the harvest normally ends by mid-April. Thai exporters offered to sell Thai 100 ICUMSA white sugar on Monday at around $250 per tonne FOB, versus last week's $235-240 per tonne FOB for May-June shipment.
ICUMSA measures the colour of sugar. The lower the ICUMSA level the higher the sugar's degree of whiteness. ICUMSA 100 is considered consumer-grade sugar, used in cupcakes and other baked goods and confectionery items.
Thailand's key buyers are Japan, South Korea, Taiwan, Indonesia and South Korea.
Farmers have started planting the 2004/05-cane crop after good rains for over a week, millers said. Millers said the new crop might be smaller than the previous one given that some cane in the north-east, which produces about 40 percent of the country's total, had been damaged due to the drought. Farmers in the north-east normally plant the new crop in November.
Leading sugar exporter Khan Kaken Sugar Industry has submitted a filing to the Thai Securities Exchange Commission (SEC) to float 329.5 million shares to the public later this year, according to the SEC.
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