The discount for Thai raw sugar hardly moved despite a drop in New York futures, dealers said on Thursday, reflecting a slow trade in Asia and ample supplies in main consumer India. Thailand's high-quality or hi-pol raw sugar was offered at a discount of 35 to 40 points to New York's March contract, unchanged from last week. March raws fell 0.72 cent to finish at 21.93 cents per pounds on Wednesday.
"India did buy a lot of sugar and it's now in the process of being delivered. There's quite a bit of sugar already and the harvest is about to start," said a dealer at an international trading house in Singapore. Anticipation of heavy buying from India after a poor monsoon damaged the cane crop in the recently-ended sugar year has sent New York futures to their highest levels in nearly three decades above 24 cents, and London whites to record at $621 a tonne.
But a combination of profit taking, fears that high prices would scare off consumers and a bounce in the US dollar erased some of the gains. London's December white sugar contract fell $11.20 to end at $558.70 a tonne on Wednesday. Brazilian sugar, the main source for Indian raws, was recently traded at 50 points under March contract for December shipment.
Offers for prompt delivery was at 80 points under New York futures, steady from last week. India imported a record of 5 million tonnes of sugar in the crop year ending September after exporting a similar amount last year. The new sugar year begins in October and this year crushing is likely to pick up from November.
India has taken a series of steps to ease the domestic sugar shortage and is pushing leading importers to quickly clear stocks of imported sugar from ports to improve domestic supply, and may confiscate consignments that are not moved out. India also buys white sugar from Thailand but Bangkok dealers said no inquiries had been reported recently from Indian buyers as well as those in Indonesia and Pakistan.
Thai white sugar was offered at a premium of $5 to $15 over London's December contract, unchanged from last week. Thailand, the world's second biggest sugar exporter after Brazil, is expected to start 2009/10 sugarcane crushing on November 20, slightly earlier than usual because of an improvement in weather. The crushing season usually starts in early December. It is expected to run through to the end of April 2010.
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