Raw sugar premiums edged up on Wednesday as recent declines in New York futures prompted buying from consumers in Asia, but ample supply in Thailand was likely to cap gains next week, dealers said on Wednesday.
Thai high-polarisation, or hi-pol, raw sugar was offered at premiums of 105 to 110 points to New York's May contract, up from 80 to 100 points last week. But premiums for J-spec, or low-quality Thai raw sugar favoured by Japanese consumers, slipped in thin trade.
"New York futures have come down, so that's why premiums for hi-pol are higher. But supply is OK. Sugar is still overflowing in Thai millers and warehouses," said a dealer in Singapore, who trades Thai sugar. "There are small parcels of sugar traded here and there in Asia."
About 71.96 million tonnes of cane have been crushed in Thailand since crushing started in November, producing 5.1 million tonnes of raw sugar and 2.2 million tonnes of whites, according to dealers' estimates. Thailand, the world's second-largest sugar exporter after Brazil, is forecast to produce a record 9.9 million tonnes of sugar in the current 2011/12 crop and export 7.5 million tonnes in 2012.
May raw sugar on ICE rose 0.36 cent to end at 24.13 cents a lb on bargain hunting on Tuesday, having fallen to a one-month low at 23.26 cents on Monday. Prices have slipped around 10 percent since hitting a four-month peak in late February.
J-spec raws sugar was quoted at premiums of 50 to 60 points to New York futures, down from as high as 85 points last week because of rising supply and a lack of demand from North Asia. Premiums for Thai white sugar slipped to $25 to London's May contract from $27 last week due to competition from India, which is selling excess sugar. India, the world's largest sugar consumer, is estimated to produce 26 million tonnes of sugar in 2011/12, higher than the annual demand of about 22 million tonnes.
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