India, the world’s largest sugar consumer, is expected to sell more white sugar to reduce excess stocks and exploit a weaker rupee while competition from Brazil has cut the premiums for Thai raws, dealers said on Thursday.
The widely traded high polarisation, or hipol, Thai raws for prompt delivery were offered at 80 points premiums to New York futures, down from 100 points last week. Brazilian raws were on par with New York futures.
“I think the trade is looking at either Brazil and Australia. I haven’t seen a spike in demand. There were deals last week for 6,000 tonnes of Thai sugar, but it’s not by our company. The deals were done at 80 points premiums last week,” a dealer in Singapore said.
Thai raw sugar premiums were under pressure as Brazil is expecting another bumper crop.
October raw settled down a slight 0.02 cent at 16.44 cents per lb on Wednesday, within sight of a three-year low of 15.93 cents touched on July 16.
In the white sugar market, offers from India pushed down Thai sugar premiums to $16 to London futures from $25 to $30 last week. The Thai values were also hurt as strong festive demand from the Middle East prompted millers to remelt raws.
High white-over-raws premiums, which measure refining profitability, fell to $115 a tonne from $126 last week.
Indian white sugar was offered at $440 a tonne, steady from last week, but down from around $500 in late June.
India’s output in the marketing year beginning October is expected to exceed the current year’s 25 million tonnes on good monsoon rains. The country typically consumes around 23 million tonnes annually.
“Almost all nearby destinations will chase Indian sugar. Yemen, Saudi Arabia and UAE are the usual buyers. Indian sugar prices are at discounts to London,” another dealer in Singapore said.
October white sugar finished down $1.50, or 0.3 percent, at $477.90 a tonne on Wednesday.
WEEK AHEAD, J-SPEC
Thai hipol raw sugar premiums could weaken next week because of pressure from Brazilian supplies, while the J-spec variety may also soften.
“J-spec has been quiet. There’s some interest for next year at 100 points for March to May delivery, but offers are at 120 to 150 points,” said the first dealer in Singapore.
Raw sugar for the Japanese market, or J-spec, for prompt delivery was offered at premiums of as high as 160 points to New York futures, but dealers said 70 to 80 points premiums were more realistic given the slow market.
J-spec stood at 50 to 60 points premiums last week.
Source: http://economictimes.indiatimes.com/markets/commodities/india-set-to-sell-more-sugar-thai-raw-premiums-ease/articleshow/22138659.cms