Thai sugar trade is expected to stay sluggish over the next few days as new offers remain thin, traders said on Monday. Raw sugar premiums for May-July 2006 shipment were offered at 115 points over the New York Board of Trade raw sugar futures price without bids. There were no offers last week.
"Most exporters have not been offering. They are still uncertain about the new crop," said one trader, referring to the crop to be harvested in November.
Thailand is Asia's largest exporter of raw sugar. Its key buyers include Indonesia, Japan and South Korea.
Exporters offered Thai 100 ICUMSA white sugar steady at $35 premiums over London prices for January-March shipment 2006 on Monday.
ICUMSA measures the colour of sugar. The lower the ICUMSA level, the higher the degree of whiteness.
Millers say they expect the new crop to produce 10-15 percent less cane at 40-43 million tonnes, down from 47 million tonnes in the previous year.
"Many of them are still waiting for the last crop survey to be finalised before making up their minds," another trader said.
The fifth crop survey, conducted by millers and traders, is due October 15-16, traders said.
Heavy rain has fallen in most cane growing areas in recent weeks with flash floods and landslides predicted in the next few days in several provinces, mostly in the north-east, the country's main cane growing area.
The rainy season usually starts in June and runs through to October.
But last year, the rain stopped in late September, cutting the crop further below expectation and leaving exporters overcommitted.
The first shipment of 8 million litres of ethanol from India is arriving Thailand later this week after the cabinet's allowed for PTT to import 18 million litres of ethanol duty fee this year following output cuts by domestic producers.
PTT, Thailand's state-run largest oil and gas firm, might not need to import all of that if domestic operators could raise the price of ethanol by 3 baht to 18 baht a litre to cover their costs, Industry Ministry official Nattapon Natasomboon said.
Ethanol operators have suspended operations, complaining they were producing at losses due to high production costs.
"They have been negotiating with oil companies. The result is expected this month," Nattapon said.
Ethanol producers Thai Agri and Thai Alcohol were in talks to buy 20,000-40,000 tonnes of molasses, a sugar cane by-product, from Mitr Phol, Thailand's largest sugar exporter, at around $90 a tonne, ex-warehouse, Nattapon said.
Thailand is the world's second largest exporter of sugar after Brazil and is a big producer of molasses and cassava, both used to make ethanol.