Oct. 13 (Bloomberg) -- The premium buyers are prepared to pay to obtain sugar from Thailand, the world’s second-largest shipper, climbed over the past five days on speculation floods in the Southeast Asian country will hurt the crop, according to Swiss Sugar Brokers.
Thai sugar for loading between March and May next year was at a premium of 0.7 cent to 1 cent a pound above the price on the ICE Futures U.S. exchange in New York yesterday, data from the brokerage show. That compares with 0.45 cents to 0.7 cents a pound on Oct. 7, it said in a report that day.
The increase in premiums “might be the result of crop- damage prospects due to recent floods,” Naim Beydoun, a broker at the Rolle, Switzerland-based company said in a report e- mailed today, adding that sugar had already been sold at a premium of 0.85 cents.
Floods in Thailand have killed more than 283 people, according to the government. The three-month-old crisis has submerged towns and rice fields, forced companies including Toyota Motor Corp. to shut factories and prompted forecasters to slash estimates for Thai economic expansion. Bangkok’s 9.7 million residents are hoarding staples and water.
The floods may delay the nation’s sugar crop, currently estimated at a record 10 million to 10.5 million metric tons, by two weeks, Michael McDougall, senior vice president of commodities at Newedge Group in New York, said in a report this week.
Even if the crop damage turns out to be less critical than expected, “there is a belief in the market that Thai values have been undervalued,” Beydoun said.
White, or refined, sugar for December delivery rose $13.50, or 2 percent, to $683 a ton by 10:10 a.m. on NYSE Liffe in London. Raw sugar for March delivery advanced 0.60 cent, or 2.3 percent, to 26.61 cents a pound on ICE Futures U.S. in New York.
--With assistance from Suttinee Yuvejwattana and Supunnabul Suwannakij in Bangkok. Editors: John Deane, Alastair Reed
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.