Thai sugar prices flipped to a discount this week versus premiums earlier this month, as rising supply from a rapidly progressing cane crush in top producer Brazil eroded demand for the sweetener from the Southeast Asian country, traders said.
Dealers noted a big lineup of sugar vessels at Brazilian ports in June and July for Asian destinations, notably to China and India, while queues in Thailand were thin.
Thai 2013/14 raw sugar for prompt shipment was traded at 10 points below New York October raw sugar futuresthis week, the traders said on Wednesday, compared with offers of 10-20 points premium seen earlier this month.
At this level, sugar from the world's No.2 exporter was still more expensive than supplies from Brazil, they said.
"In fact, buyers bid as low as 50 points below New York prices, but (Thai) sellers were reluctant to sell at that low," a trader from an international trading firm said on the sidelines of an industry conference in Bangkok.
A surplus from the current 2013/14 crop is dragging on the global sugar market. New York sugar prices, currently at 17.16 cents a lb, have gained 5 percent this year, up slightly from a sharp 49 percent drop seen over the past three years.
While the international sugar market is expected to swing to a deficit in the year to September 2015, after four years of surplus, gain in global prices of the sweetener will be capped by higher carried-over stocks, Platts Kingsman said on Tuesday.
The data provider reiterated its forecast for a 2014/15 sugar deficit of 2.1 million tonnes and cautioned that risks to production in Thailand and top producers Brazil and India remained.
But as of now, Brazilian raw sugar is seen seizing market share from Thai exports due to narrowing price differentials.
"Some lots of Brazilian sugar were offered as low as 30 points below New York prices and that was much more competitive compared to Thai prices," said another Thai trader.
Source: Reuters
Dealers noted a big lineup of sugar vessels at Brazilian ports in June and July for Asian destinations, notably to China and India, while queues in Thailand were thin.
Thai 2013/14 raw sugar for prompt shipment was traded at 10 points below New York October raw sugar futures
At this level, sugar from the world's No.2 exporter was still more expensive than supplies from Brazil, they said.
"In fact, buyers bid as low as 50 points below New York prices, but (Thai) sellers were reluctant to sell at that low," a trader from an international trading firm said on the sidelines of an industry conference in Bangkok.
A surplus from the current 2013/14 crop is dragging on the global sugar market. New York sugar prices
While the international sugar market is expected to swing to a deficit in the year to September 2015, after four years of surplus, gain in global prices of the sweetener will be capped by higher carried-over stocks, Platts Kingsman said on Tuesday.
The data provider reiterated its forecast for a 2014/15 sugar deficit of 2.1 million tonnes and cautioned that risks to production in Thailand and top producers Brazil and India remained.
But as of now, Brazilian raw sugar is seen seizing market share from Thai exports due to narrowing price differentials.
"Some lots of Brazilian sugar were offered as low as 30 points below New York prices and that was much more competitive compared to Thai prices," said another Thai trader.
