Thai sugar trade was sluggish on Monday with exporters, increasingly worried about the next crop, reluctant to make new offers to sell for shipment in 2006, traders said. "Many exporters are not offering. They are worried about the new crop. They do not want to end up over-committing," said one trader, referring to the crop to be harvested in October in Thailand, Asia's largest exporter of sugar. "The rainy season has started this month, yet it has not rained properly."
Thai 100 ICUMSA white sugar, considered consumer-grade, for March 2006 shipment was offered at $35 over London prices on Monday.
Bids were at $30 over.
ICUMSA measures the colour of sugar. The lower the ICUMSA level the higher the degree of whiteness. Traders said concerns were mounting about a repeat of last year, when the rains stopped in September, one month than usual.
The new crop is expected at around 43 million tonnes, 10 percent lower than the previous crop due to persistent drought, traders and millers said.
Drought delayed planting for months in the north-east and was likely to cut output in the main sugar-producing region by 22 percent to 14 million tonnes, officials said.
The north-east accounts for about 40 percent of Thailand's cane production. Farmers in other areas started planting cane this month, but they complain about insufficient raid.
"Rain has fallen only in a few growing areas and it is not yet enough," said Buntline Ketosis, a director of the Thai Cane and Sugar Board. "That is not a good sign given that we are now in the planting season."
Thailand, whose main buyers are Japan, South Korea, Taiwan, Indonesia and Malaysia, produced 47.8 million tonnes in the current crop year ending September, down from 64.5 million tonnes in the previous year due to drought.
The crop year runs from October to September.
The harvest normally ends in mid-April, but this year it finished on March 21, almost a month than usual due to the smaller crop.