A few cargoes of Thai white sugar for delivery in the first quarter changed hands at small premiums to London futures, while 6,000 tonnes of Indian sweetener was heading for Indonesia, dealers said on Thursday. Thai whites were sold to various end-users in Asia, including Vietnam and the Philippines, at premiums of between $30 and $70 above London's March futures, which hovered near $800 a tonne.
"Definitely, some industrial users are buying at levels as high as $70 so far, but that's very small parcels," said a physical dealer in Singapore. "Some big industrial users have also asked us for some quotes," he added. Thai whites' premiums rallied to a record of $250 in July last year as buyers struggled to get stocks before the Thai crushing season. Premiums for Thai raws were steady at 110 to 130 points above New York futures, with no reports of deals.
Sugar crushing in Thailand, the world's second-biggest exporter after Brazil, gained in pace this month, with nearly 1 million tonnes of sugar already produced since the season started in early December. Thailand is estimated to produce about 6.8 million tonnes of sugar in the current crop year, down slightly from 6.9 million in the previous crop.
Dealers expected fresh supply from Thailand to enter the physical market this month, but high prices could prompt traditional buyers such as Indonesia to shift to India, which offers whites at a discount to London futures.
Indonesian state-run firm PT PPI bought 6,000 tonnes of Indian white sugar at between $710 to $730 a tonne free on board, part of a government plan to purchase more than 400,000 tonnes of refined sugar in 2011, dealers said on Thursday. PT PPI could not be reached for comment. Although the amount was small, it would be Indonesia's first purchase of Indian sugar in many years. Southeast Asia's largest consumer of sugar mainly imports from neighbouring Thailand. Indian white sugar is currently offered at $750 to $760 a tonne, free on board. India, the world's second-largest producer after Brazil, plans to allow unrestricted exports of 500,000 tonnes of sugar because of a rise in domestic output
Dealers said Indonesia's state procurement agency Bulog had been offered Indian sugar at prices below London futures, including freight for shipment before May. Bulog failed to secure any of the 60,000 tonnes of white sugar it sought in a tender last month, citing high prices. "Bulog has been offered white sugar at $745 a tonne C&F. We may strike deals with some dealers in the next few days," said a source with the agency.
Looking ahead, dealers awaited a tender of more than 100,000 tonnes of Thai raw sugar, paying close attention to the premiums buyers would have to pay. The state-run Thai Cane and Sugar Corp (TCSC) will open a tender to sell a combined 101,332 tonnes of raw sugar from the current 2010/11 and next 2011/12 crops in a tender next week, a senior official said on Wednesday. Thailand allocates 800,000 tonnes of raw sugar each year for the TCSC to sell. Half is sold through tenders to international trading firms and the rest to domestic mills for export.
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