Thailand’s Raw Sugar Premium Seen High on Limited Western Supply
The premium buyers pay for raw sugar from Thailand, the second-biggest exporter, is “high” because of limited supplies from the Western Hemisphere, according to Green Pool Commodity Specialists Pty Ltd.
Raw sugar from Thailand is being offered at $3 to $3.20 a pound above the price on ICE Futures U.S. in New York, Green Pool, a Brisbane-based research company, said in a report e- mailed today. It was for sale at $2.60 a pound a week earlier.
“Thai raw premiums were steady but not traded as Western Hemisphere supplies are still rickety,” Tom McNeill, a director at the Brisbane, Australia-based company, said in a weekly report e-mailed today.
Above-average rainfall last month in Brazil, the world’s largest producer, delayed the crop and shipments. Sugar output in Brazil’s center south, its main growing region, fell 29 percent to 6.7 million metric tons from the start of the 2012-13 season through the end of June compared with a year earlier, according to industry group Unica.
In India, the world’s second-biggest producer, local prices rose to the highest in 18 months because of lack of rains, Green Pool said. The monsoon, which brings more than 70 percent of the country’s annual rainfall, was 22 percent lower than a 50-year average since June 1, the weather bureau said July 15.
“People remember 2009, when a similar deficit in the monsoon caused estimates of the crop to be reduced by 5 million tons,” Paul Bannister, head of the sugar brokerage at Marex Spectron Group in London, said in a report e-mailed today. “A sensible ’worst case scenario’ would therefore be to the order of a 3 million tons loss.”
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.