Jan. 9 (Bloomberg) -- White sugar’s premium over the raw variety is holding steady because exports of the sweetener from India have been smaller than initially estimated, according to Swiss Sugar Brokers.
White, or refined, sugar on the NYSE Liffe exchange in London was trading $91 a metric ton above the price of the raw sweetener on ICE Futures U.S. in New York by 10:36 a.m. London time, up from $89 a ton a month ago, data on Bloomberg show.
The pace of sugar exports from India, the world’s second- largest producer, suggests that the country may be “hard pressed” to ship the planned 1 million tons, Michael McDougall, a broker at Newedge Group in New York, wrote in a Jan. 5 report. Indian mills obtained permission to ship 356,237 tons as of Jan. 4, according to data published on the food ministry’s website. India exports mostly the refined variety.
The “white premium keeps hovering around $92, challenging the white sugar surplus, mainly supported by less aggressive Indian exports so far,” Naim Beydoun, a broker at the Rolle, Switzerland-based company, said in a report e-mailed yesterday.
Global production will be 6 million tons more than consumption in the 2011-12 season ending Sept. 30, Rabobank International estimates.
Sugar exports from India are unlikely to top last season’s 3 million tons, Toby Cohen, a director at the London-based broker and researcher C. Czarnikow Futures Ltd., said at a conference in London in November.
The white premium is also gaining support as supplies from Thailand, the world’s second-largest exporter, will only reach the market next month, Beydoun said. Mills there started processing sugar cane from the 2011-12 harvest into sugar on Nov. 15, according to researcher F.O. Licht GmbH.
--Editors: John Deane, Dan Weeks
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.