Modest tonnages of the first Indian raw sugar export sales of 2015/16 are likely to have been contracted for shipment early in 2016, European trade sources said on Thursday. The global sugar market is watching out for the first signs of Indian raw sugar sales before authorities publish official confirmation of export incentives targeting 2015/16 exports of at least 3.2 million tonnes.
There was no official confirmation of any Indian raw sugar export sales, but dealers said there was market talk of some 100,000-150,000 tonnes of Indian raw sugar exports to refineries in Iraq and Bangladesh. "I think stuff (raw sugar) is connecting," one senior trader said. "Above 15 cents a pound looks interesting." ICE raw sugar futures closed at 14.91 cents a pound on Wednesday, after touching a 10-month peak of 15.78 cents on Tuesday. The ICE raw sugar futures market was closed for the US Thanksgiving holiday on Thursday. Traders said high volatility in ICE raw sugar futures had complicated deals involving Indian mills looking to export. "The Indian mills need to be nimble on their feet and they're not good at that," a trader said. Indian mills would monitor the impact of a tighter domestic market if export sales picked up, traders said.
Dealers said physical trade in centre-south Brazilian raw sugar was routine this week, with offers of prompt delivery Brazilian raw sugar at 50-70 points below ICE March futures. Dealers quoted Brazilian refined sugar in containers at $5-6 per tonne above ICE March white sugar futures, in quiet dealings this week. "Refined sugar production has been considerably reduced year on year in centre-south Brazil," one European trade source said. "In the 2015/2016 crop year wet weather has capped refined sugar availability further. Even with little buying interest, there was no selling pressure."