Asia sugar: Thai crushing progresses; Pakistan whites traded
SINGAPORE: Cane harvest has gained in pace in Thailand with around 100,000 tonnes of sugar produced so far during the current season, but the physical market lacks activity as consumers look for bargains given increasing supplies, dealers said on Tuesday.
Thailand, the world’s second-largest exporter after Brazil, has crushed around 1.94 million tonnes of cane as of Nov. 30, higher than about 1.63 million tonnes at the same period in the 2011/12 season, they said.
Sugar output, which includes raws and whites, stood at around 107,820 tonnes as of end-November, higher than around 101,470 tonnes in the corresponding year-ago period. Thai sugar crushing starts in the middle of November and lasts through April.
“Crushing is ongoing without any problems. I think the market is likely to be quiet until Christmas. It looks like people are planning their holidays, rather than making purchases,” said a dealer in Singapore.
“Indonesia is well covered until the first half of next year. We are waiting for Thai and Brazilian crop to be sent to them,” said the dealer, referring to Southeast Asia’s largest buyer.
Other consumers were waiting for Thai premiums to fall because of pressure from rising output and as cheaper sugar from Brazil had also attracted buying interest from Indonesia, said dealers.
Thai high polarisation, or hipol, raw sugar was quoted at premiums of 65 points to New York’s March contract this week, hardly changed from 60 to 70 points last week. Brazilian raws were being offered at about 40 points discounts to futures.
Indonesia, which is set to become the world’s top importer of raw sugar in the year to September 2013, will see refining capacity rising by a third next year, to 4.2 million tonnes, to meet rising demand from the food and beverage industries.
The International Sugar Organization has raised its forecast for a projected global sugar surplus in 2012/13 to 6.18 million tonnes, raw value, and said prices could remain under bearish pressure until the end of the current crop cycle.
In refined sugar, Thai white sugar premiums were unchanged at $15 to London’s March contract, with buying interest at much lower levels.
Indian whites, which compete with the Thai variety, were offered at premiums of $35 to $55 a tonne to the March contract, unchanged from last week, while sweetener from Pakistan was quoted at a flat price of up to $550 a tonne, higher than around $520 last week.
“Last week I heard Pakistan sold whites at $520, but I don’t think you can get it at the same price now because the domestic price is already $535,” said another dealer in Singapore. “The Middle East is buying the sugar.”
Pakistan has allowed the export of an extra 200,000 tonnes of sugar, on top of the 300,000 tonnes already allowed, as the government aims to trim surplus stocks and bolster local prices.
In neighbouring India, the government has allowed mills to sell 7 million tonnes of sugar in the open market between December and March, including 200,000 tonnes of unsold stocks from the October-November period, higher than the average monthly allocations of about 1.7 million tonnes.
WEEK AHEAD, J-SPEC RAWS
The premiums for the J-spec variety, or low-quality Thai sugar favoured by Japanese, were unchanged at 70 points to New York futures this week, but the value could drop next week due to a sluggish physical market.
March raw sugar on ICE Futures US rose 0.41, cent or 2.1 per cent, to settle at 19.75 cents a lb on Monday, after earlier jumping 3.1 per cent to 19.94 cents on short-covering, a weak US dollar and a broad-based advance in the commodity complex.