India was said to be inquiring about a cargo or two of white sugar, but business was subdued on the whole given the recent firmness in prices, brokers said Monday. "There was an inquiry for 40,000 to 50,000 tonnes of ICUMSA 45 whites. It might be India or a trading house which is looking to sell sugar to India," a senior dealer for a major brokerage house said.
A trading house manager said India, the world's largest consumer of sugar, "was looking for a cargo or two" of white sugar for prompt shipment.
ICUMSA measures the colour of the sugar. The lower the ICUMSA level, which most buyers covet, the higher the degree of whiteness. ICUMSA 100 is seen as consumer-grade sugar.
Traders in Thailand, one of the world's key exporters of sugar, said there was wide speculation that India, whose cane crop was pounded by drought, would buy almost 2.0 million tonnes of white sugar for June to August shipment.
They said the Thais have about 1.0 million tonnes of both 100 ICUMSA and 45 ICUMSA white sugar which would be available for sale. On a freight basis, dealers said shipping the sugar between the two Asian nations would be cheaper.
India has turned into a major importer of sugar because drought harmed its cane harvests in both the 2003/04 and 2004/05 seasons (October/September).
Indian sugar production in the year to September 2005 is expected to drop to 11.5 million tonnes from 13.8 million a year earlier and 20 million tonnes in the season before that. Consumption usually stands at 18 million.
Analysts said the market was also monitoring plans by Pakistan to import sugar. There was also scattered talk a buyer in Central Asia was said to be looking for raw sugar, but details were sketchy, they said.
Pakistan has approved a plan to import 250,000 tonnes of raw sugar in 2005 to ease supply shortages and curb rising domestic prices.
"The problem is that many of these potential customers saw prices rise and are hesitating a bit," a broker said.
Last Thursday, the key March raw sugar contract on the New York Board of Trade closed at 8.96 cents a lb to mark its highest finish since 8.99 cents on January 6. It was trading at 10:35 am EST (1535 GMT) at 8.90 cents, up 0.02 cent on the day.
Cash sugar differentials remained steady.
Quotes for raw sugar for prompt shipment were seen at flat to 5 points below NYBOT March delivery, unchanged from last week's level.
Analysts said shipping rates continued to soften.
The Baltic Exchange's Handymax index, representing the smaller- to medium-sized dry-bulk fleet used primarily to haul soft commodities, closed Friday at 27,586 points. It was trading on Monday at 27,370 points.
A few months ago, the index touched a lifetime peak of 35,512 points, sparked mainly by heavy of iron ore and coal from China and other Asian nations.