Jan. 22 (Bloomberg) -- The discount on raw sugar from Brazil, the world’s top producer, narrowed as buyers emerged and several cargoes were sold, according to Swiss Sugar Brokers.
Raw sugar for loading this month at the port of Santos, the country’s biggest, traded at a discount of 0.3 cent a pound to the price of the March contract on the ICE Futures U.S. exchange in New York, data from the Rolle, Switzerland-based broker showed. That compares with a discount of 0.5 cent on Jan. 11. Offers of raw sugar for sale have become “scarce for the moment,” Naim Beydoun, a broker at the company, said in a report e-mailed yesterday.
Those who need to buy physical sugar “are scratching their heads and wondering where the surplus sugar in Brazil has gone,” Beydoun said. The sugar is “either in strong hands looking for better values, or against some business done at destination in the Far East as well in the Middle East or both.”
Raw sugar from Brazil for loading in February was more expensive than this month, trading at 0.15 cent a pound under the exchange price, according to Swiss Sugar Brokers. That compares with a discount of 0.3 cent on Jan. 11.
In Thailand, the world’s second-biggest shipper, raw sugar for loading from March to mid-May was at a premium of 0.55 cent to 0.7 cent a pound to the March contract, data from the broker showed. Thai raw sugar is keeping its premium even as no sales have been concluded, Beydoun said.
“Sellers and buyers are sticking to their positions and to their previous values,” he said. Sellers believe that “with Brazil cash values firming up,” Thai prices “should be holding too.” Buyers, on the other hand, expect premiums to drop “on the back of a good crop in Thailand and, of course, a global surplus.”
Demand for white sugar from the Middle East and North Africa region is “giving a boost” to prices in the physical market, Beydoun said. A lack of offers of white sugar from the European Union is helping push prices up in other regions.
Raw sugar for March delivery was 0.4 percent lower at 18.29 cents a pound by 6:44 a.m. in New York. White, or refined, sugar for March delivery fell 0.6 percent to $487 a ton in London.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.