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Asia Sugar: Pakistan sells whites; Thai hipol may attract buyers

September 11, 2012


Pakistan announced in May that it would allow the export of 200,000 tonnes of white sugar. —File Photo

SINGAPORE: Pakistan is selling white sugar at prices below London futures and may issue more export permits, while Thai raws for delivery next year could attract buyers as sweetener from the current crop has sold out, dealers said on Tuesday.

White sugar from Pakistan was recently traded at up to $550 a tonne, lower than the October contract on Liffe, which settled up 0.4 per cent at $558.4 a tonne on Monday. Whites from India and Thailand were offered at premiums to London futures.

“You can still find refined sugar from India at a $35 premium. Some trades have been done at this level. People who are hedging against London are able to sell Indian sugar to the Middle East,” said a dealer in Singapore.

“We heard that Pakistan may issue more export licences. We have sold Pakistani sugar but the quantity is small. The price indication is $540 to $550. Buyers are from the Middle East.”

Pakistan announced in May that it would allow the export of 200,000 tonnes of white sugar because of an expected surplus, but dealers said many exporters were still waiting for licences.

Neighbouring India was still offering sugar in the physical market even though a surge in local prices ahead of a series of religious festivals and a drop in global prices have dissuaded many dealers from signing fresh contracts.  India, the world's largest consumer, is likely to produce more sugar than is consumed locally for a third straight year in the 2012/13 marketing year, although the exportable surplus will be small, its food minister said on Tuesday.

In Thailand, the world's second-largest exporter after Brazil, white sugar was quoted at premiums of $50 to $55 for delivery this year, largely the same as last week, though there were no reports of deals.

Thai high polarisation, or hipol raw sugar, for shipment next year was steady at premiums of 75 to 80 points above New York's March contract. The next season is expected to start in November or December and runs through April.

The last available Thai raw sugar from the current crop was sold to trading houses at the highest premium in two years above 300 points to New York's October contract, and consumers are now shifting their focus to next year's delivery.

“I think as the season starts, premiums could drop to 50 to 60 points. I haven't heard any deals yet, not for us,” said a dealer in Singapore.  “But I think buyers are quite comfortable with these kinds of prices. There's a bit of a bounce in the global market, but prices have been down for so long, so they are due for a technical correction.”

The J-spec variety or low quality raw sugar favoured by Japanese buyers was offered at 90 points premiums to the March contract, hardly changed from last week.  ICE October raw sugar futures rose 0.25 per cent to settle at 19.43 cents per lb on Monday, extending their recovery from two-year lows hit last week. WEEK AHEAD

Indonesia, Southeast Asia's largest sugar consumer, could start making inquiries next week after recently announcing it is to issue import permits for 250,000 tonnes of raws to help plug a domestic shortage of the sweetener for industrial use.

“We heard that the government has issued some of the licences,” said a third dealer in Singapore.