SINGAPORE: China has bought at least 100,000 tonnes of raw sugar from Thailand for nearby shipments, sending signals to a sluggish physical market the country is stocking up again after recent declines in New York futures, dealers said on Tuesday.
China is expected to produce 12 million tonnes of sugar in the year that began in October, up 15 percent from a year earlier, but consumption is forecast at 14 million tonnes, leaving a shortfall of 2 million tonnes.
"Deals have been done at somewhere around $550 CIF," said a dealer who declined to be identified, adding that his firm was involved in some of the deals struck last week.
Another dealer said China had bought more than 100,000 tonnes of sugar.
Early last week, dealers said China was checking on prices but stopped short of striking any deals. China, which accounts for about 9 percent of global production, imported 336,995 tonnes of sugar in October, up 33.33 percent from the previous month.
The physical market in Asia was under pressure from rising supply from Thailand after the crushing season started last month and main consumer India decided to sell more sugar to ease excess supply.
India has issued a formal order for 1 million tonnes of sugar exports under open general licence, a government statement showed on Monday, nearly a fortnight after the country allowed such sales as output was seen exceeding demand.
New York March sugar futures gained 0.63 cent, or 2.7 percent, to finish at 24.08 cents a lb on Monday due to a weaker dollar, but the contract was still near a five-month low hit in November.
"Chinese buyers are actively booking shipments for next year due to attractive global prices," said Zhan Xiao, an analyst with Xinhu Futures, adding that importers could make a profit of 800 yuan a tonne by bringing sugar to the local market for March shipment.
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