Thai HiPol cash premiums slump as harvest period nears end

The Thai HiPol cash premiums finished lower in the week ended April 8 as the harvest period approached its end. The spot April shipment was assessed at 157 points over NY No. 11 May (K) futures on April 8, dropping by 8 points compared to the week ended April 1.

Thai premiums fell across shipment windows assessed by S&P Global Commodity Insights April 4 amid stronger futures prices and no new official updates on whether India will be limiting its exports to 8 mil mt to hold a reasonable closing stock.

The cash premiums for Thai HiPol remain steady for the rest of the week with the sugarcane crushing in Thailand nearing the end.

According to official data released by the Office of The Cane and Sugar Board (OCSB), only 26 mills remain open for crushing and the crushing rate is also much lower. As of April 6, the mills had crushed 91.4 million mt of sugarcane to produce 10.1 million mt of sugar.

"Some mills are going to close post Songkran. However, at this stage there are not going to be many changes to the estimates of the crop which would be around 92 million-93 million mt," a market source said.

Thailand producers also continued to utilize the futures rally to price the 2022-23 sugar production. The Thai Cane and Sugar Corporation held another Quota B tender on April 8 for sale of 48,000 mt of raw sugar for the May 1-July 15 shipment period.

Louis Dreyfus won the tender at over NY No. 11 May (K) 2023 futures + 141 points, according to a tender report seen by S&P Global.

With Ramadan starting, market participants are also closely watching the sugar imports to Indonesia to ensure that there would be sufficient supply for the season and to keep domestic prices stable despite a spike in demand.

The demand from Indonesia has been strong for the first quarter after the government issued the import licenses for the year. "Based on the lineups, Indonesia has imported a total of 2.1 million to 2.2 million mt of sugar in Q1, of which 1.1 million mt came from Thailand, 930,000 mt from India and a balance 150,000 mt from Brazil and Australia," according to a Singapore-based sugar analyst.

There were also local media reports that Indonesian agriculture imports from India had come to a halt in the week ended April 8 because of its non-registration with the laboratories that check the quality of agricultural produce and are in charge of the issuance of such certificates. However, market sources said that this import halt had an impact on imports of finished products and that flows of raw sugar into Indonesia were not affected at the moment.