Sugar premiums tick lower as prices rise

Thai sugar premiums inched down after recent rises in futures prices, but buying interest from China and tight prompt supply could offer support to the lethargic market, dealers said yesterday. Dealers, citing shipping reports, said raw sugar was being loaded at ports in top producer Brazil for shipment to China, which is estimated to face a sugar shortage of 2 million tonnes this year. "There's quite a lot of raws either already arrived or on their way to China, but maybe they haven't gotten through the supply chain yet. It may be signalling there's a bit of prompt white sugar shortage in some regions," said a dealer in Singapore. "There's a lot of talk about the Chinese buying prompt white sugar from both Vietnam and Thailand. There's certainly quite a lot of vessels being loaded in Brazil for China." Article continues below China said in May it would release 250,000 tonnes of white sugar from state reserves, the first such sales this year, to help cover a supply gap and cool domestic prices. But a slip in Thai raw sugar premiums for prompt delivery suggested that purchases by China could either be small or for forward months. The widely traded high polarisation, or hipol Thai raw sugar, was offered at 180 to 200 points above New York's October contract down slightly from 250 points last week, with no deals reported. There was, however, buying interest for shipments in the first half of next year as premiums also slipped. Premiums for J-spec, or raw sugar favoured by Japanese consumers, fell to 150 points from 180 points premiums last week.