Sugar premiums held steady on Friday after a week of almost flat trade as buyers anticipated a fall in prices with the arrival of the new cane harvest from India and Thailand.. Thai high polarisation, or hipol, raw sugar was quoted at premiums of 95 and 100 points over New York's March contract, unchanged from a week earlier.
"Prices have fallen in the past 20-30 days and may drop further," said a dealer in Singapore.. Benchmark sugar prices have fallen 3.7 percent in the past one month. On Thursday, New York's March raw sugar contract jumped 0.9 cent or almost 3.5 percent to finish at 26.91 cents per lb, the highest spot finish in over three weeks. . The failure of New York sugar to test a resistance at 27.19 cents per lb has undermined its effort in rising towards a range of 27.19-27.64 cents, unless it can stay above a support at 25.58 cents, Reuters analyst Wang Tao said.
Traders do not need to buy raw sugar immediately, said Abah Ofon, commodities analyst at Standard Chartered Bank in Singapore, as they have healthy inventories.. "Any rebound in sugar prices may not be sustainable due to harvest pressure in Asia and elsewhere. The new season sugar is round the corner in India, China and Thailand," Ofon said.. Mills in India, the world's top consumer and the biggest producer after Brazil, could churn out 26.5 million tonnes in the new season that began this month, adding to oversupply. Local consumption is at around 22 million tonnes. India has more than six million tonnes of sugar in stocks.
Thailand is forecast to produce around 100 million tonnes of sugar cane in the 2011/12 crop, the highest ever, which would yield around 10 million tonnes of sugar. . Thai white sugar was offered at premiums of $70 and $80 above London's December contract, steady from last week.. Ofon said India's plans to exports from November will also impact prices.. "India can export up to 3 million tonnes of sugar in 2011/12.
Exports from India are round the corner and the decision will definitely impact prices," he said.. India will decide in early November how much sugar it could export in the new season that began this month, Food Minister K. V. Thomas said, as the country weighs managing bulging stocks with fighting persistently high inflation.