Thai raw sugar for nearby delivery changed hands at its highest premiums in two weeks as consumers scrambled to buy the sweetener following backlogs in Brazilian ports, dealers said on Wednesday. Thai raws were traded at 180 points over New York's July contract, with offers rising to 200 points from 170 points late last week.
Premiums were earlier under pressure from record output in Thailand, the world's second-largest exporter after Brazil. "People were taking their time, waiting for prices to weaken. But now they have decided to buy, but supply from Brazil is not coming out because of the queues at the ports which can last for up to three weeks," said a dealer at a trading house in Jakarta.
"People who are running out of stocks have to rush to buy Thai sugar. People are chasing Thai sugar, that's why premiums are rising." The number of ships loading, waiting or arriving to export sugar from Brazil's two main ports is growing and should let up in the coming days, shipping agencies said on Tuesday.
Although backlogs to haul sugar from the world's largest producer of the sweetener are not uncommon, these numbers are not normal for this early in the season. Brazilian raws for June shipment were offered at premiums of 100 to 110 points over New York's July futures. Dealers said Indonesia, which is Southeast Asia's largest consumer, was among buyers chasing Thai raw sugar, but there were no other details.
Indonesia, which buys raw sugar from Thailand, Brazil and Australia, has issued a permit to import 100,000 tonnes of raw sugar to Industri Gula Nusantara (IGN). That was part of the country's plan to import 226,000 tonnes of raw sugar from May until the end of 2011 in order to fill idle milling capacity.
Thailand's cane production was higher than expected at a record of 93 million tonnes, prompting the extension of its current 2010/11 sugar crushing season by a month to the end of May. New York's July raw sugar contract gained 0.16 cent to close at 21.93 cents per lb on Tuesday as the softs complex consolidated in another lethargic low-volume session.
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