Premiums on Thai sugar dipped on Monday and were expected to fall a little further due to thin demand, traders said. Offers for Thai 100 ICUMSA white sugar, considered consumer grade, for August shipment were at $7 over London prices, or $459 per tonne free on board, down from $470 per tonne this month. ICUMSA measures the colour of sugar.
The lower the ICUMSA level the higher the degree of whiteness. "London futures prices could rise or fall due to speculation, but for Thai physical sugar prices I see only further falls as demand is very thin," a trader said.
London's benchmark August settled at $452 per tonne on Friday after trading in a narrow range of $454-$450, with speculative selling overhanging the market. Premiums on sugar from Thailand, Asia's biggest exporter, were at $10 over London prices in June and $15 over in May.
"I expect a little drop in Thai premiums over the next few weeks," another trader said. Prices were also expected to drop because there was no fresh demand, traders said. "Vietnam is still in talks. They asked for our offer but they haven't made any decision," said a trader at a trading house, which is negotiating with Vietnam.
The Vietnamese government has approved the import of 150,000 tonnes of both white and raw sugar, but has not issued import licences yet. Traders said Vietnam could wait until July or August to decide whether to buy as it was estimated to hold around 250,000 tonne of white sugar in stock.
However, Vietnam would probably buy less than the 150,000 tonnes because several thousand tonnes of sugar were likely to have been smuggled into the country during the delay, they said.
"Several thousand tonnes have been imported from India plus several thousand have been smuggled in. I think finally Vietnam could buy only 100,000 tonnes," a trader said.
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