The premium buyers have to pay to obtain raw sugar from Brazil, the world’s largest producer, is rising as sellers to the Far East deliver the sweetener from the South American country, according to Swiss Sugar Brokers.
Raw sugar for June loading at the port of Santos was at a premium of 0.15 cent to 0.2 cent a pound to the price of the July contract on the ICE Futures U.S. exchange in New York on June 3, the broker said in an e-mailed report. That compares with a premium of 0.12 cent a pound on May 27.
Raw sugar from Thailand for June loading was at a premium of 1.8 cents to 2.5 cents a pound (or 250 points) to the exchange price on June 3, according to the broker. Thailand is the world’s second-biggest sugar exporter.
“Some of the strength in the Brazilian cash premium derives directly from the Thai premium’s strength,” with the result that sellers to the Far East are now supplying sugar from Brazil instead of Thailand, said Naim Beydoun, a broker at the Rolle, Switzerland-based company.
Delays to harvesting in Brazil and a backlog at one of the country’s main terminals are also supporting premiums, Beydoun said. More than 1.7 million metric tons of sugar were waiting to be loaded at Brazil’s main ports yesterday, according to consultancy SA Commodities in Santos, Brazil.
“Bad weather and new upcoming ships will increase queues” mainly at Santos and Paranagua ports, where rains are prevailing and delaying operations, Luiz Carlos dos Santos Jr., head of sugar brokerage and operations at SA Commodities, said in a report e-mailed yesterday. Santos and Paranagua are Brazil’s two biggest ports.
Raw sugar for July delivery was 2 percent higher at 19.44 cents a pound by 5:34 a.m. on ICE.
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.