SINGAPORE : Pakistan is likely to buy Thai or Brazilian sugar as it struggles to ease a supply shortage, while premiums for raws barely moved despite a correction in the futures market, dealers said on Friday. Pakistan, traditionally the world's 9th largest raw sugar consumer, plans to start importing half a million tonnes of white crystal sugar by December and wants to buy 500,000 of raws through private mills after an expected shortfall in the current crop.
"It's very obvious that Pakistan has tried to avoid buying as long as possible but now they are running out of sugar. After a long time of trying to make up their mind, they'll buy something at very high prices," said a physical dealer in Singapore. "They'll probably buying a mixture of Thai and Brazilian sugar. Thailand doesn't usually have much availability until late January or early February, but I suspect there's some white sugar available from the previous crop season."
Thai raws, a main source for Pakistan, barely changed from last week's levels at 80 to 85 points above New York's March contract for March to May shipment, suggesting there was little activity before crushing starts in the new crop season. "I guess at those premiums, sugar is expensive for buyers," said a dealer at an international trading house in Jakarta.
Pakistan faces a shortfall of more than 1 million tonnes of sugar, which may swell in the second half of next year if it does not rev up purchases, even though sugar prices have rallied to multi-year highs on strong buying from main consumer India and worries about a widening global supply deficit.
New York's March raw sugar contract fell 0.56 cent to finish at 22.74 cents a pound on Thursday after a firm US dollar weighed on softs commodities complex. Raw sugar futures had rallied to 28-1/2-year above 24 cents in September on the prospect of Indian buying after a poor monsoon decimated the country's cane crop, with expectations of purchases from other consumers such as Indonesia and Pakistan adding to the bullish sentiment.
"We are waiting for a formal approval from the Commerce Ministry for starting the tendering process for importing sugar," said Saeed Ahmed Khan, chairman of state-run Trading Corporation of Pakistan. "They will tell us whether it should be in one go or should be staggered. There is no preference for a country or origin. Quality is our preference, it should meet the quality standards set by the government, and of course the lowest bid."
While fresh supplies of Thai raw sugar were likely to enter the physical market early next year, Brazilian raws were available for prompt shipments, with India expected to strike deals on a price dip. Brazilian raws, the main source for Indian sugar, were quoted at a discount of 100 points below March contract, slightly bigger than 85 to 90 points offered last week. J-spec, or lower-quality raw sugar for the Japanese market, was offered at a discount of 50 points below futures for October to December shipment, barely changed from last week.
Source: Aj TV website
"It's very obvious that Pakistan has tried to avoid buying as long as possible but now they are running out of sugar. After a long time of trying to make up their mind, they'll buy something at very high prices," said a physical dealer in Singapore. "They'll probably buying a mixture of Thai and Brazilian sugar. Thailand doesn't usually have much availability until late January or early February, but I suspect there's some white sugar available from the previous crop season."
Thai raws, a main source for Pakistan, barely changed from last week's levels at 80 to 85 points above New York's March contract for March to May shipment, suggesting there was little activity before crushing starts in the new crop season. "I guess at those premiums, sugar is expensive for buyers," said a dealer at an international trading house in Jakarta.
Pakistan faces a shortfall of more than 1 million tonnes of sugar, which may swell in the second half of next year if it does not rev up purchases, even though sugar prices have rallied to multi-year highs on strong buying from main consumer India and worries about a widening global supply deficit.
New York's March raw sugar contract fell 0.56 cent to finish at 22.74 cents a pound on Thursday after a firm US dollar weighed on softs commodities complex. Raw sugar futures had rallied to 28-1/2-year above 24 cents in September on the prospect of Indian buying after a poor monsoon decimated the country's cane crop, with expectations of purchases from other consumers such as Indonesia and Pakistan adding to the bullish sentiment.
"We are waiting for a formal approval from the Commerce Ministry for starting the tendering process for importing sugar," said Saeed Ahmed Khan, chairman of state-run Trading Corporation of Pakistan. "They will tell us whether it should be in one go or should be staggered. There is no preference for a country or origin. Quality is our preference, it should meet the quality standards set by the government, and of course the lowest bid."
While fresh supplies of Thai raw sugar were likely to enter the physical market early next year, Brazilian raws were available for prompt shipments, with India expected to strike deals on a price dip. Brazilian raws, the main source for Indian sugar, were quoted at a discount of 100 points below March contract, slightly bigger than 85 to 90 points offered last week. J-spec, or lower-quality raw sugar for the Japanese market, was offered at a discount of 50 points below futures for October to December shipment, barely changed from last week.
Source: Aj TV website
