26/03/10 – The premium of raw sugar from Thailand, the second-biggest exporter, over the benchmark futures price may have reached the highest in almost three decades on a lack of supply, an industry group said.
The premium is quoted by traders at 350 points, or 3.5 cents, a pound over the May-delivery contract traded in New York, Vibul Panitvong, executive chairman of Thai Sugar Millers Corp., which groups the country´s 46 millers, said in an interview at an industry meeting.
“I´ve never seen the level this high in the past 28 years, which reflects a lack of supply, both from Australia and Brazil and Thailand, amid strong demand,” Vibul said on the Thai island of Koh Samui.
Raw sugar futures dropped 3.5 percent to 17.05 cents a pound on ICE Futures U.S. yesterday. The most-active contract has plunged 44 percent since reaching a 29-year high of 30.4 cents on Feb. 1, when the Thai sugar premium stood at about 0.3 to 0.5 cents.
“The premium is likely to decline as Brazil will start crushing soon and Australia will begin crushing in June,” Vibul said, without providing an estimate.
The high Thai premium “may draw sugar from Brazil into Asia, as its price combined with freight costs will be competitive to Thai prices,” said Parin Amatyakul, vice president of Mitr Phol Sugar Corp., Thailand´s largest miller, said today. | 