The premiums buyers are prepared to pay to obtain raw sugar from top producer Brazil and from Thailand, the world’s second-largest shipper, fell this month on ample supplies, according to Swiss Sugar Brokers.
Brazilian sugar for loading in April at the main ports in the center south, the biggest growing region, was offered at a premium of 0.7 cent a pound above the price of the May contract on the ICE Futures U.S. exchange in New York, data from the Rolle, Switzerland-based broker showed. That compares with 0.75 cent a pound on April 1.
Thai sugar for loading in April was at a premium of 0.6 cent a pound to the price of the May contract on ICE, the broker said in a report e-mailed yesterday. That compared with a premium of 0.65 cent on April 1.
“The market finally discovered that the April and June sugar trade flow is not as tight as was expected,” Naim Beydoun, a broker at the company, wrote in the report.
Additional supplies from India, the world’s second-largest producer, will “fill the Brazilian gap” as the harvest there is delayed, according to Beydoun.
India has already authorized 3 million metric tons of sugar exports as local supplies are higher than demand this season. The harvest in Brazil, which should have already started, will begin later this month or early in May, according to Cepea, a University of Sao Paulo research group.
The cane crop in Thailand may be close to 104 million tons, “exceeding all expectations,” Beydoun wrote.
Raw sugar for July delivery was up 0.1 percent at 23.19 cents a pound by 7:25 a.m. on ICE. The price fell as much as 2.2 percent yesterday.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
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