Thai sugar premiums steady, rains could hit crop

Thai sugar premiums traded steady on Monday, but heavy rains have raised fears of flood damage in some growing areas, traders said.
Thai raw sugar premiums for July-September 2004 shipment were at 125/140 points on New York CSCE futures. It was at120/130 points last week. Heavy rain has affected some sugarcane growing areas this month, and Thai weather forecasters are expecting more bad weather in the days ahead.
"During June 14-15, the tropical depression Chants will move north-westward and will be downgraded to a low pressure cell, causing more rainfall over Thailand," the meteorological apartment said in a report.
Any flooding in those areas could hamper the new 2004/05crop which has just been planted, traders said. "If rain is too heavy and causes floods, it could damage the new crop. The cane has just been planted.
It could not-survive if the floods last for days," said one trader. The government has estimated the next crop at 60 million tonnes, down from 64.48 million in the previous 2003/04 given that some cane in the northeast, which produces about 40percent of the country's total, has been damaged by drought.
Thailand is now in the rainy season, which will traditionally last until September. Thailand is Asia's largest exporter of raw sugar, with its key buyers' Japan, South Korea, Taiwan, Indonesia and Malaysia.
Thailand's 2003/04 crushing season ended on April 30 and supplies are limited because some of the country's 46 mills are still refining whites from raw in coming months, mainly to meet existing export contracts, traders said.
The crop year runs from October to September, but the harvest normally ends by mid-April.
Traders said most of the sugar from the lower-than-expected2003/04 crop would be shipped this year with only a small volume to be carried over into next year.
Thai exporters offered to sell Thai 100 ICUMSA white sugar on Monday steady at $250 per tonne FOB for June shipment. ICUMSA measures the colour of sugar. The lower the ICUMSA level the higher the sugar's degree of whiteness.
ICUMSA 100is considered consumer-grade sugar. Only a handful of exporters have offered to sell sugar from the coming 2004/05 crop to international trading firms under forward agreements for 2005 shipment, traders said.