Thai sugar premiums are expected to remain steady this week, with exporters keen to strike deals for 2005 shipment ahead of the harvest next month, traders said.
Thai raw sugar premiums for March-May 2005 shipment were offered at 95 points over CSCE futures without bids on Tuesday, unchanged from last week. Traders said that a few deals had been done over the past week for Thai 100 ICUMSA white sugar for March-April shipment.
"Traders at international trading firms have clinched deals to buy Thai 100 ICUMSA white sugar at $8 over London prices," said an official at one large exporting firm.
"We are negotiating to sell more this week." ICUMSA measures the colour of sugar. The lower the ICUMSA level the higher the degree of whiteness. ICUMSA 100 is considered consumer-grade sugar.
The price of molasses, the by-product of sugar cane, was quoted steady at $60-$62/tonne, free on board, on Tuesday from last week. The domestic price of molasses was offered steady at 2,000 baht/tonne ($49/tonne), ex-warehouse.
Traders said they were waiting for Indonesia, one of the world's biggest sugar importers, to announce its import policy for 2005. Indonesian officials said this month that they planned to issue up to 250,000 tonnes of white sugar import permits for 2005 in November.
Thailand is one of Asia's major sugar exporters. Its key buyers are Japan, South Korea, Taiwan, Indonesia and Malaysia. Most sugar cane growing areas got little rain this month and millers and traders said they expected the 2004/05-crop harvest to start by the middle of November.
Thailand's harvest and crushing season for the previous crop began on November 23 and lasted till April 30. Traders expect cane output to drop to 58-60 million tonnes in the crop year that began on October 1, from 64.48 million tonnes in 2003/04 due to drought and reduced growing areas.
The government has set Thailand's 2005 domestic consumption of sugar, or Quota A, at 1.9 million tonnes, down from 1.92 million tonnes this year, officials said. Thailand's sugar output is managed under three quota allocations.
Quota A, the domestic quota is refined white sugar. Quota B raw sugar is sold through the semi-official Thai Cane and Sugar Corporation for export. Quota C allocates both raw and whites to millers for exports.
The Thai Corp sold 253,334 tonnes of raw sugar to international trading firms for exports in 2005, but have no plan to sell the remaining 146,666 tonnes in coming weeks, traders said.