A small quantity of Indian white sugar changed hands for nearby shipment, but consumers shunned Thai origin because of high prices, dealers said on Wednesday. Indonesia’s plan to buy nearly half a million tonnes of white sugar for shipment next year had yet to stir the physical market, with premiums for Thai whites steady at $200 above London futures – not far from a July record at $250.
Indian white sugar was traded at as high as $675 a tonne free-on-board for prompt shipment, but dealers said quantity was limited and there were no details of the buyers. “Indian whites has been traded at $650 to $665. That’s for October shipment,” said a dealer in Singapore, who declined to give other details.
London December white sugar ended down $9 at $598.80 per tonne on Tuesday, reflecting declines in New York raw sugar, despite news that Pakistan had decided to waive a duty on raw sugar imports and Indonesia would buy more white sugar than expected.
Pakistan on Tuesday said it was waiving a 25 percent regulatory duty on the import of raw sugar in the face of a 1.2 million tonne supply shortfall after floods ravaged the crop. While Indonesia is expected to buy Thai sugar, Pakistan could turn to India for raws and white sugar. India could export up to 3.5 million tonnes of sugar in the new season that begins in October, higher than earlier estimates as recent rains raise prospects of boosting output.
Sugar output in India’s main cane producing state of Uttar Pradesh is likely to be nine to 12 percent below previous estimates after floods ravaged plantations, but the amount is still above this season’s 5.8 million tonnes.
Indian whites with 150 ICUMSA had been offered as high as $690 a tonne free-on-board, and there was also talk in the physical market that Indian raws had been traded. The lower the ICUMSA level, the greater the degree of whiteness.
“I think some deals have been done with Indian VHP for prompt shipment. I am not sure who the supplier is, but prices are definitely cheaper than Brazil,” said another dealer in Singapore, referring to very high polarisation sugar.
Copyright Reuters, 2010