Thai sugar premiums were stuck in a range as the prospect of more supply in Asia kept consumers at bay, while the Philippines was desperate to sell the sweetener due to rising output and high domestic stocks, dealers said on Tuesday. Raw sugar from the Philippines, the low-quality J-spec quality favoured by Japanese consumers, was offered in a wide range of premiums from as little as 40 points to as much as 500 points above New York futures, with no deals.
The Philippines wants to sell more than 300,000 tonnes of sugar this year, up from 200,000 tonnes targeted previously, and will for the first time also offer refined sugar, agriculture minister Proceso Alcala said on Tuesday. But dealers said quality concerns and the high ICUMSA level turned off buyers. Thai Jspec was quoted at premiums of between 80 points to 100 points for prompt delivery.
"Unfortunately, it's true the Philippines is not used to having to focus on what buyers want. I guess that's what you get if you haven't been in the world market for a few years," said a dealer in Singapore. "With the Thais, most mills will give you a fairly standard quality, but there's a variability in this Philippine production." The Philippines expects to close the 2010/11 season in end-August with 780,000 tonnes of sugar stocks, while raw sugar output in 2011/12 is likely to hit at least 2.4 million tonnes. The Philippines wants to sell sugar this year because of a surplus in domestic production, but so far only 66,000 tonnes have been booked for shipment to Japan, Indonesia and South Korea.
These are the first shipments outside the quota that the Philippines has made since the 2007/2008 crop year, as domestic output hits a three-year high. "The Philippines is still offering sugar at premiums, but the demand for Thais is also muted because most people have covered their requirements," said a dealer in Bangkok. "Thailand has a lot of sugar to sell." The International Sugar Organisation (ISO) expects Thailand, the world's second-largest exporter after Brazil, to produce around 10 million tonnes of sugar in 2011/12, topping its 2010/11 output of 9.62 million tonnes.
The widely-traded Thai high polarisation or hipol variety fetched premiums of 200 to 220 points above New York's prompt contract, October, but bids only appeared at 120 points. Premiums for next year's delivery were much lower at 60 to 70 points because of rising output, with bids at 20 to 30 premiums. Thai white sugar premiums were steady at $70 above London's October contract.