Thai Raw-Sugar Premiums Rise as Brazil Supplies Remain Limited

Raw-sugar premiums in Thailand, the world’s second-largest exporter of the sweetener, climbed to the highest level in two weeks as supplies from top producer Brazil remain limited due to falling production and shipping delays.

The Thai raw-sugar premium is 1.8 cents a pound above the New York futures price, according to Sucden Financial. As many as 58 vessels are waiting to load sugar at Brazil’s main ports, according to ICAP Futures LLC. The line-up is a result of a lack of the sweetener, Luis Rangel, a broker at ICAP wrote in a report yesterday.

“Raw-sugar premiums in Thailand have been rising in recent days as traders continue to face delays in loading cargo out of Center-South Brazil,” Peter de Klerk, an analyst a broker C. Czarnikow Futures Ltd. said by phone from London today.

“The Thai raw sugar premium for nearby delivery was reported to have traded at 180 points over July New York, the highest in two weeks,” Nick Penney, an analyst at Sucden Financial in London, wrote in a report today.

Sugar production in Brazil’s Center-South, the country’s main producing region, dropped 69 percent from a year earlier at the beginning of the harvesting season, industry association Unica said on May 12. Production fell due to lower yields, harvest delays and a higher percentage of sugarcane being directed to ethanol production.

Output fell to 795,000 metric tons between the start of the harvest in mid-March and the end of April, Unica said. In the same period a year earlier, production was 2.56 million tons.

Raw sugar for July delivery rose 0.43 cent, or 2 percent, to 22.36 cents a pound by 9:04 a.m. local time on ICE Futures U.S. in New York.

source: bloomberg