August 21, 2012 / 4:37 AM / 5 years ago

Asia Sugar-Eyes on Indonesia; Thai premiums around 300 pts

* Thai hipol at premiums of 200 to 300 pts, trade thin

* Brazilian premiums steady at 10 to 15 premiums

* India seen selling sugar

By Lewa Pardomuan

SINGAPORE, Aug 21 (Reuters) - Thai raw sugar premiums have hardly moved this week as high prices scared off buyers, while Indonesia is expected to chase Brazilian sweetener when trading returned to normal after a Muslim holiday, dealers said on Tuesday.

Indonesia, which is Southeast Asia’s largest buyer of the sweetener, plans to buy 510,000 tonnes of raw sugar to help plug a shortage for industrials use and to beef up stocks for next year.

Indonesia traditionally buys sugar from Thailand, but it would have to wait until December to get fresh supply from the world’s second-largest exporter. On the other hand, crushing is underway in top producer Brazil, where raws were being offered at small premiums to New York futures.

“Premiums of 10 to 15 are about right for Brazilian sugar. Most Indonesian buyers are asking around to get a feel for the market, while waiting for the licences to be issued,” said a dealer in Singapore.

“I think the government will release the permits after the holiday.”

The Eid al-Fitr festival in Indonesia, the world’s most populous Muslim nation, will last through Wednesday, but dealers expected physical trading to resume next week.

Indonesia buys about 2 million tonnes of raw sugar a year, mainly for industrial use and mostly from Thailand, although it shipped in 118,129 tonnes of white sugar last year.

Prices of white sugar in Indonesia hit an all-time high in late June, despite the start of its crushing season in May, and the government has ruled out further imports of white or raw sugar for household use.

Premiums for Thai high polarisation, or hipol, raw sugar were as little as 200 points to as high as 300 points versus New York’s October contract, indicating thin trade. The premiums were quoted at similar levels last week.

Thai raw sugar premiums have risen because of high demand for white sugar in the Muslim fasting month of Ramadan and tightening stocks after the crushing season ended in May. Hipol premiums stood at 90 to 95 points in January.

Premiums for J-spec, or raw sugar for the Japanese market, were steady at 300 points to New York futures. Thai white sugar premiums were unchanged at $15 to $20 premiums to London’s October contract.

INDIAN SALES, WEEKAHEAD

Dealers said there was talk some exporters from top consumer India were selling sugar after the government released 400,000 tonnes of additional non-levy sugar for the September quarter to rein in prices during the country’s festive season.

“I heard they have sold some cargoes to Sri Lanka. Prices are all over the place. I heard it’s about $600 FOB, and also at $570. But millers are still quoting white sugar at $675,” said a dealer in Singapore, referring to last week’s prices.

“I don’t know why they were so desperate to sell at lower prices.”

Concerns over poor monsoon rains and rising domestic futures had initially prompted Indian exporters to hold back stocks to make sure that supply was ample ahead of the Eid al-Fitr celebration and a Hindu festival later this year.

Thai premiums could slip next week if Indonesia decides to buy Brazilian sugar. Also, there was competition from Pakistan, which was selling white sugar at around $570 on a free on board basis. (Editing by Clarence Fernandez)

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