SINGAPORE: White sugar from India and Pakistan was traded to the Middle East this week as Japanese consumers chased nearby cargoes, but Thai hi-pol raw sugar struggled amid competition from cheaper Brazilian stocks, dealers said on Tuesday.
In other parts of Asia, the second-largest consumer China was well stocked ahead of the Lunar New Year break in February while Indonesia stayed away from the physical market on ample supply.
Indian white sugar fetched premiums of $30 to $35 a ton to London’s March contract, steady from last week. Refined sugar from Pakistan was quoted at between $505 and $535 a ton.
“White sugar from Pakistan is constantly going into the Middle East. We heard that the government will subsidise sugar transport, which I think should cut the prices. I have not seen it yet, though,” said a dealer in Singapore.
“Indian white sugar is also traded in the Middle East.”
Pakistan allowed exports of 500,000 tons of sugar in 2012 to trim surplus stocks and boost domestic prices. Indian traders had sealed some deals for small amounts of Pakistani sugar despite a domestic surplus, seeking to capitalise on lower prices across the border.
Thai white sugar, which competes with sweetener from the Indian sub-continent, stood at premiums of $15 to $20 to London futures, down slightly from $25 to $30 last week. March white sugar on Liffe dropped $7.10, or 1.4%, to close at $507.70 per ton on Monday.
“We saw one or two thousand tons of Pakistani sugar traded, but I do not know if there is more.,” said another dealer in Singapore.
Thai dealers could cut the premiums next week on slow demand, but steady purchases from the Middle East may keep white sugar prices from India and Pakistan at current levels, despite rising global supply.
The International Sugar Organization has raised its forecast for a projected global sugar surplus in 2012-13 to 6.18 million tons. That was higher than a previous forecast of 5.86 million, but remained below the 6.99 million estimated for 2011-12.
Published in The Express Tribune, January 16th, 2013.
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