The Thai sugar trade for 2006 shipment is expected to remain sluggish over the next few days with few overseas buyers in sight, but some exporters have started offering for 2006 delivery, traders said. Thai 100 ICUMSA white sugar, considered consumer grade, were offered at $45 over London prices for March shipment without bids on Monday. It was offered at $35 over without bids a week.
"A handful of exporters are offering forward contracts for March shipment, but we are not yet keen to buy because overseas buyers have yet to make any move," one dealer said.
Traders said they would not make large purchase until the buying pattern of Indonesia one of the main customers along with Japan, South Korea, Taiwan and Malaysia, for Thailand, the world's biggest sugar exporter next year was known.
"We have to know first how much Indonesia would want to buy and how much for raw and whites," said one trader. "And what specification they would go for." Indonesia, Southeast Asia's largest buyer, placed curbs on sugar imports in late 2002 to protect prices at harvest time due to an influx of cheap imports and rampant smuggling.
In 2004, it issued import quotas for 597,600 tonnes, of which 405,000 tonnes was white sugar. Indonesia has issued quotas for 727,000 tonnes so far this year, of which 500,000 tonnes were for whites.
Indonesia imported white sugar with specifications of 70 and 150 ICUMSA this year, traders said. ICUMSA measures the colour of sugar and the lower the ICUMSA level, the higher degree of whiteness.
Trade for shipment in 2005 was thin on Monday, but traders said they expected some business to be done in coming weeks. "We should see some buying out of Vietnam.
They are still looking for raw sugar," said one. Vietnam has issued permits for the import of 57,000 tonnes of raw sugar in a bid to cope with the impact of a prolonged drought on its cane crop.
At least 2,000 tonnes of Thai sugar had been delivered to Vietnam, traders said. Several vessels were due to arrive Thailand this week, mostly to carry sugar to Japan, Indonesia and North Korea, shippers said.
"Two vessels, Raman and Fu Xing, are due to ship 13,300 tonnes of white sugar for North Korea," said one. Rain has been falling in many Thai growing areas since the wet season started in mid-May, but traders and millers said it was not enough.
They estimate the new crop at around 43 million tonnes, 10 percent lower than the previous crop as some cane in the north-east, which produces about 40 percent of the country's crop, has been damaged by drought.
The crop year runs from October to September. The harvest normally ends in mid-April, but this year it finished on March 21, almost a month earlier than usual due to the smaller crop.