Thai depressed by RI's delay of sugar shipment

Thai depressed by RI's delay of sugar shipment

BANGKOK (Reuters): The Thai white sugar market was depressed
by market talk that Indonesia had delayed shipments of 100,000
tons of sugar from Thailand due to economic turmoil, trade
sources said.

Trade reports South Korea sold back up to 200,000 tons of
sugar from Guatemala to traders due to the economic crisis also
depressed the market further.

Sources said even though the contracts were not canceled, the
talk of delay -- from January to March and April -- sent negative
vibes through a sensitive market which has been jittery about the
impact of the regional crisis on consumption of sugar.

Indonesia has already bought 700,000-800,000 tons of white
sugar from Thailand but a big chunk of the contracts are yet to
be executed, they said.

"We are checking around for confirmation. The news was
negative because the delay indicated that there could be some
problems on the Indonesian side," said a dealer with a major U.S.
trading house.

"The market paid a lot of attention because Indonesia is a big
buyer. It could be the biggest buyer this year in the absence of
China, and South Korea has already bought a lot from South
America," he said.

China, Indonesia, South Korea and Japan were among major
buyers of Thai sugar.

But the shipment during the first half of this month seemed to
move smoothly. Shipping sources told Reuters that offtake from
Indonesia this month was active.

Vessels were shipping 60,550 tons of white sugar to the
country between Jan 11-16, they said. Louis Dreyfus and Tate and
Lyle were among buyers.

The white premium of Feb/March delivery was offered at $15 per
ton over London futures but without bids.

The raw sugar market was quiet in the absence of demand. Thai
raw premiums for February/March shipment were flat. March/May was
quoted around 10/20 points over New York's Coffee Sugar and Cocoa
Exchange.

May/July was offered 35/40 points over CSCE without any bid,
trader said.

A trader from one prominent Japanese house said Korea has
already sold back 200,000 from 250,000-300,000 tonnes of raw
sugar it bought earlier from Guatemala.

But another trader from a European house said he heard the
sell-back was only 30,000-40,000 tonnes although there has been
attempt to sell more.

"This report is a double-edged sword for Thai sugar. If South
Korea did really sell back, the question is whether it will buy
from Thailand immediately to cover this amount," said a sugar
mill executive.

"If it does, good for us. But if they sold because of short-
term financial hiccups and have no intention to buy any time
soon, there will be too much sugar sitting there in the market to
depress everybody, us included,' he said.