The state-run Thai Cane and Sugar Corp (TCSC) will open a tender next week to sell 52,000 tonnes of raw sugar from the 2010/11 crop, a senior official said on Wednesday. "The tender will be held on Wednesday, September 15, and buyers could offer at premiums over New York raw sugar futures prices," the official said.
New York raw sugar futures for October delivery surged to a six-month high on Tuesday, rising 0.85 cent or 4.1 percent to finish at 21.45 cents per lb, the strongest close for the spot contract since March 8. The 2010/11 crop is due to be harvested and crushed from early December, slightly later than normal as severe drought earlier this year forced farmers to leave the cane in the ground longer than expected to let it mature and produce more sugar, traders said.
Thailand, the world's second-biggest exporter, allocates 800,000 tonnes of raw sugar each year for the TCSC to sell. Half is sold through tenders to international trading firms and the rest to domestic mills for export. After next week's tender, the TCSC will have 78,000 tonnes of raw sugar left out of its 2010/11 allocation, which would be sold through a tender after the start of the crushing season.
"We have sold a lot of sugar in advance. Now we want to see how much cane we produce this year before holding the last tender to sell what we have left," the official said. The Office of Cane and Sugar Board (OCSB) forecast in July that 2010/11 sugar production could drop to 6.0 million tonnes, down from the previous forecast of 6.8-6.9 million tonnes due to drought and the spread of pest. It will issue an updated official forecast after a fresh survey in September.