Asian sugar trade likely to remain thin

Asian sugar trade likely to remain thin

BANGKOK (Reuters): Asian sugar trade is expected to remain thin in coming days, with little fresh demand seen as the market awaits a Chinese tender mid-week, traders said on Monday.

"Indonesian buyers have been taking white sugar from India, but slowly and in small volume," said one trader.

Indonesia, Southeast Asia's largest sugar importer, ships in around one million tonnes of sugar, mostly whites, each year. India and Thailand are Asia's main sugar suppliers.

Indonesia's harvest season started in April and will run through to September.

Indian white sugar was trading at around $262-$265 per tonne C&F Jakarta for prompt shipment, traders told Reuters. Thai white sugar was quoted at $265-$270 per tonne FOB.

The market is currently watching for a sugar tender in China, scheduled for Wednesday. China is expected to sell around 100,000 tonnes of white sugar from its national reserves, traders said.

"It will be interesting to see how much sugar will be sold in the tender and what prices they will get," a trader said.

The minimum tender price is likely to be set at 3,300 yuan ($398.7) per tonne, according to traders.

In a tender earlier this month, the Chinese government sold 70,500 tonnes of white sugar, with prices ranging between 4,230 and 4,460 yuan per tonne.

Guangxi ex-factory white sugar has been quoted steady for several weeks at around 4,200-4,250 yuan per tonne.

Traders said only a significant rise above that level, to 4,500-4,600 yuan, might prompt the Chinese government to come onto the market to import more sugar.

Although orders for 500,000 tonnes of raw sugar have been placed for June-August shipment, China is expected to import another 500,000 tonnes later in the year due to expected domestic shortfalls, traders said.

Traders said some Thai mills have already started to offer white sugar for March-May 2002 shipment. The sugar was offered on Monday at a $6 premium over London prices, without bids.

Thai white sugar for July 2001 shipment was offered at a $2 discount under London prices, without bids.

Thai raw sugar premiums for July-September were offered steady at 70 points over New York CSCE, without bids. Premiums for October-December shipment were offered unchanged at 100 points over, with no bids.

In the Thai market, there was talk the semi-official Thai Cane and Sugar Corporation (TCSC) is likely to hold a sugar auction next month, to sell 400,000 tonnes of Quota B raw sugar for 2002 shipment.

Paris-based Jean Lion has nominated a few vessels to take 25,000 tonnes of Thai raw sugar for prompt shipment to various destinations in Asia including China, Indonesia and Malaysia, Thai shippers said.