Thailand, the world's second-biggest sugar exporter, has cut its 2013/14 sugar quota for domestic consumption by 100,000 tonnes, a senior official said, increasing the amount available for export despite a global surplus. The Office of Cane and Sugar Board (OCSB) said it expects 2014 sugar exports to reach a record 8.8 million tonnes, although traders have been sceptical about rising exports as the glut has depressed sales.
The OCSB, which oversees the country's sugar industry, reduced the quota for domestic consumption to 2.4 million tonnes from 2.5 million tonnes set earlier. "Domestic consumption was not as high as we expected earlier. So we think we'd better export," OCSB head Somsak Suwattiga told Reuters. The OSCB previously forecast exports in 2014 at 8 million to 9 million tonnes, up from 6 million tonnes a year earlier. Thai traders have been offering sugar at discounts to New York futures for the first time since 2009, after more than a third of the recent crop remained unsold early last month.
Thai high polarisation, or hipol, raws for prompt delivery were offered at discounts of 25 points to New York raw sugar futures last week, with no reports of bids or deals. The International Sugar Organisation (ISO) forecast the global sugar surplus at 1.3 million tonnes in 2014/15, down from a 4.0 million tonnes in 2013/14 as consumption picks up. Thailand produced a record 11.3 million tonnes of sugar in its 2013/14 crop due to good weather.