Sugar crushing in Thailand, the world's second-biggest exporter, is running smoothly, but traders said on Friday they were still sceptical about yields in the current 2010/11 season, which might be lower than expected. Around 960,000 tonnes of sugar has been produced from the 11.84 million tonnes of cane that has been crushed since the 2010/11 season started in early December, according to data from the Office of the Cane and Sugar Board (OCSB).
-- Thai sugar yield may be low due to drought
-- Traders reluctant to commit to deals
"We may have to revise our sugar production forecast again by end-February after seeing what happens to the yield," said Prasert Tapaneeyangkul, the OCSB's secretary-general. Sugar content in the cane was not very good as the 2010/11 crop was hit by drought early in 2010, then some plantations were damaged by severe flooding in November.
The OCSB has forecast previously that Thailand would produce around 6.9 million tonnes of sugar in the current crop. Crushing is due to finish in mid-April. "We need to evaluate the situation again. But I think we could have at least 6.8 million tonnes this year," Prasert said.
Given the uncertainty about production, traders and millers were still cautious about signing deals. "Trading is expected to be busy again by February when people have a clear picture of Thai production," one trader said, adding that Thai sugar was changing hands at unchanged premiums.
The premium on raw sugar was offered at 120 points over New York futures, while the premium on white sugar was at $45 over London white sugar futures, traders said. Traders said little sugar had been shipped out of Thailand recently.
Around 60,000 tonnes of raw sugar and 10,000 tonnes of white sugar were shipped to Indonesia this month, while around 30,000 tonnes of J-spec raw sugar was sold to Japan, traders said.
WEEK AHEAD The state-run Thai Cane and Sugar Corp (TCSC) is expected to open a tender to sell 2010/11 raw sugar from its 800,000 tonne quota. Prices are likely to reflect world demand, which remains strong, traders said. ICE March raw sugar dropped 1.96 cents, or 6.1 percent, to close at 30.24 cents per lb on Thursday, moving in a wide 2.13 cent range.
Comments
Comments are closed for this article.