Thai raw sugar premiums were almost steady this week as buyers pushed back purchases anticipating a further drop in prices due to higher supplies from top producers Brazil, India and Thailand. But prices of Indian white sugar, which competes with Thai sugar, inched up to $620-$630 due to a weak rupee.
Last week, white sugar from India, the world's top consumer and the biggest producer behind Brazil, was offered at $600-615 a tonne, lower than $635 a tonne in early March. Premiums for Thai high-polarisation, or hi-pol, raw sugar stood at 65 points to New York's May contract against quotes of 65 and 70 points last week.
"Reflecting poor demand, the premium remained weak this week. The demand is poor as no one is in any hurry to buy, knowing full well that supplies are more than sufficient and going to improve further," said a dealer in Singapore who trades Thai sugar.
Brazil, which accounts for half of the world's sugar trade, looks likely to produce 38.9 million tonnes in the 2012/13 season, up 5.4 percent from a year earlier. India could see a surplus of 4 million tonnes in the current 2011/12 season. Last month, it allowed another 1 million tonnes of unrestricted white sugar exports, taking the total approved so far to 3 million tonnes.
Thailand, the world's second-largest sugar exporter after Brazil, is forecast to produce a record 9.9 million tonnes of sugar in the current 2011/12 crop and export 7.5 million in 2012. "Buyers were not in a rush to buy as they have many choices, especially as we have India in the market this year," said a Bangkok-based trader.
India, which is selling sugar to the Middle East, Africa and some neighbouring countries such as Bangladesh, could allow more exports this season, said a New Delhi-based trader with the Indian unit of a global trading company. "Despite Brazilian sugar entering the world market this month, India has the opportunity to export until June when supplies from Brazil will peak," said Ashwini Bansod, senior analyst at MF Global Commodities India.
Elsewhere, Indonesia, which mainly buys from Thailand, imported 155,000 tonnes of raw sugar, kicking off purchases to tide over a shortage. J-spec, or raw sugar favoured by Japanese consumers, was quoted at premiums of 25 points to New York futures, down from as high as 35 points last week.