Asian sugar: few cargoes of Indian whites traded; Thai premiums soften

A few cargoes of Indian refined sugar changed hands at a small discount to London futures, while premiums for Thai whites softened on the prospect of more sales from the sub continent, dealers said on Tuesday.
Among raws, premiums for Thai sugar edged up following a drop in futures prices. There was hardly any buying interest, with dealers already taking into account Indonesia's move to buy more than 2 million tonnes of raw sugar this year. "I would say Indonesia's plan has mostly be factored in," said a dealer in Singapore.
"I think the surprises for the market this year maybe more from China. If Chinese production is not as high as expected, they could be forced to buy more sugar. Chinese prices are at the equivalent of over $1,050 a tonne. That's a very high price."
There were talks that China had been buying sugar in recent months to boost stocks, but there were no details. Last month, Beijing released more white sugar from state reserves amid rising food prices. China's sources imports include South Korea, Australia, Cuba, Brazil and Thailand.
Premiums for Thai white sugar slipped to $15 to $20 a tonne to London's March contract from between $30 and $70 last week as dealers noted steady offers of Indian sweetener for nearby shipment. Dealers said a US trading house bought Indian white sugar at $765 a tonne, which could later be sold to Indonesia - Southeast Asia's largest consumer. Indonesia has issued permits to import 2.43 million tonnes of raw sugar for 2011, an increase of 5 percent from 2010, and is chasing white sugar to bridge an anticipated shortfall in domestic production.
State-run trading firm PT PPI had bought 30,000 tonnes of white sugar from Thailand and India - part of Indonesia's plans to import 450,000 tonnes of white sugar this year for household consumption. Other state-run companies are expected to strike deals in the next few weeks. London March white sugar settled $1.20 higher at $774.20 on Monday, while May finished $1.60 lower at $738.30 per tonne.
Looking ahead, dealers would closely watch the progress of sugar crushing in Thailand, which is the world's second-largest exporter after Brazil, and purchases of white and raw sugar by Indonesia. Thai raw sugar was offered at a premium of 140 points above New York futures from between 110 to 130 points last week for the high polarisation variety, or hi-pol. Raw sugar for the Japanese market, or J-spec, changed hands at 90 points over New York's March contract.
"I don't think Indonesian buyers will be willing to buy sugar at 140 points premium," said a dealer in Jakarta. "I bet buying interest will emerge at 100 points." Sugar crushing in Thailand 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.