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White Sugar Premiums Near Record But Vietnam and the Philippines Still Buying
Premiums for Thai white sugar held near record levels on steady purchases from Southeast Asia, but consumers turned their back on raws as futures prices surged to a 7-month high, dealers said on Friday.
There were no offers for the widely-traded high polarization, or Hi-pol Thai raws, for prompt shipment. Trading of raw sugar for the Japanese market, or J-spec, slowed to a trickle after some cargoes were traded at record premiums last week.
''Vietnam and the Philippines are still buying bits and pieces of whites. There's a bit of demand out there, but Thai whites are still commanding high premiums about $200 FOB basis,'' said a physical dealer in Singapore.
“Premiums for raws are holding strong. But a lot of buyers are standing back, looking at the market from a distance. It's made worse by gains in New York,” he added.
New York October contract rose 0.66 cents to end at 24.48 cents per lb on Thursday. It was the highest settlement for spot raws since Feb. 24. London’s December white sugar futures climbed $15 to end at $608.20 per tonne.
Premiums for Thai whites hit a lifetime high at $250 in July.
J-spec was unchanged at 850 points premiums above New York on Friday -- within sight of record premiums of 900 points hit last week, when about 4,000 tonnes of the sweetener changed hands.
Premiums for Hi-pol raws for next year's shipment were quoted at 260 points -- far below those paid by US agribusiness group Bunge Ltd at a Wednesday tender held by state-owned Thai Cane and Sugar Corp.
Bunge bought 52,000 tonnes of J-spec Hi-pol spec at a premium of 351-367 points over New York for July-September, 2011 shipments.
The 2010/11 crop is due to be harvested and crushed from early December, slightly later than normal as severe drought this year forced farmers to leave cane in the ground longer than expected to let it mature and produce more sugar.
Premiums for Thai sugar for nearby delivery have surged because of drought in the previous crop season, while congestions at Brazilian ports added to fear of a global shortage. Thailand is the world's second-largest sugar exporter after Brazil.
Lewa Pardomuan
Reuters
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