Pakistan likely to buy Thai, Brazilian sugar

Saturday, November 21, 2009
SINGAPORE/ISLAMABAD: 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 tons 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 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 tons 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.