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Asia Sugar-Thai millers likely to sell soon--trade

HONG KONG: Thai raw sugar premiums were on the high side and likely to fall after millers began to sell pent-up supply, traders said on Wednesday.

Thai millers will be unable to delay selling their sugar indefinitely in hopes of higher prices because competing supply from Brazil, South Africa and Australia will begin to arrive in June and July, they said.

"In the short term, premiums are probably at the top. I am not optimistic about the raws. There is no fresh demand," a trader said.

The Thai raw premiums over Coffee, Sugar and Cocoa Exchange prices for March/May and May/July were 15 to 25 points (100 points 1 U.S. cent).

The July/September premium was 20 to 30 points.

However Thai white sugar premiums should strengthen, with demand coming from the Middle East, Bangladesh and Indonesia, traders said.

Indonesia has bought at least 100,000 tonnes of sugar in the past three months and is expected to maintain that pace amid signs that domestic prices are starting to rise, a trader said.

In addition, Pakistan was expected to import about 200,000 tonnes of white sugar, with the suppliers likely to be Thailand, Dubai and China.

The Thai white premiums over London prices for April/May were $7 to $9.

In China, the price of white sugar ex-factory in Guangxi held steady during the week at about 3,180 yuan ($383) a tonne.

Some major mills were offering to sell at 3,350 yuan but few trades were concluded at that price, a trader said.

Prices have recovered dramatically in recent months due to an expected shortfall in production promoted by the government and aided by frost damage to the sugar cane crop late last year.

The Chinese Sugar Association has estimated output of the current sugar crop at 7.1 million tonnes, a trader said. He said consumption has been estimated at about 8.5 million tonnes, leaving a shortfall of about 1.4 million tonnes.-Reuters