Raw sugar premiums in Thailand, Asia's biggest exporter, were lower on Monday and expected to remain under pressure in the next few days as overseas demand is sluggish, traders said. "Buyers from Taiwan and Vietnam have been checking prices. I doubt that they really want to buy something," a trader said.
Raw sugar premiums for prompt shipment were offered lower at 35 points over New York Board of Trade raw sugar prices without bids on Monday, down from last week's 45 points over.
Offers for Thai 45 ICUMSA white sugar, considered high quality consumer grade, for prompt shipment were steady at flat to London prices and there were bids at $6 under London prices. ICUMSA measures the colour of sugar. The lower the ICUMSA level the higher the degree of whiteness. Millers have asked the government to cut 200,000 tonnes of white sugar from its allocation for domestic consumption and to allow them to export it, saying domestic supply is abundant, traders said.
The government raised Thailand's quota for domestic consumption by 200,000 tonnes to 2.2 million tonnes in March to relieve tight supply caused by panic buying because millers said supply was short.
The Thai Cane and Sugar Board is scheduled to consider the request on Thursday, a board official said. Some traders said the board should turn it down. "Exports have already been sluggish with so much sugar left unshaped," one said. "If the government allows their request, Thailand is going to end up with a lot of sugar which will need to be carried over to the next crop and that will further depress premiums," another said.
Weak overseas demand was already reflected in a sharp 52 percent fall in exports in the first seven months of this year to 1.03 million tonnes. There has been good rain in cane growing areas, but some flash floods in several northern provinces over the weekend had little impact on the new crop, traders said.
The new crop should be up between 25 and 30 percent at 60-62 million tonnes from 47.70 million tonnes of cane produced in the current crop ending September, traders said.
Loading activity was heavy with several vessels nominated for various destinations, including Russia. The Cargill and Toshoku trading houses were each due to ship 6,000 tonnes of raw sugar to Vladivostok this month, shippers said. Thailand was believed to have contracted to sell around 40,000 tonnes of raw sugar to Russia so far for shipment in June, August and September. Thailand's main buyers are Indonesia, Japan, South Korea, Taiwan and Malaysia.