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Agriculture

Thai Quota B tender sees 47,851 mt HiPol raw sugar, 28,482 mt J-Spec awarded

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Thai Quota B tender sees 47,851 mt HiPol raw sugar, 28,482 mt J-Spec awarded

The sixth Thai Quota B tender for the 2017-18 (October-September) seasontook place Tuesday, with a total of 47,851 mt of HiPol raw sugar and 28,482 mtof J-Spec awarded, market sources said.

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Through the six tenders, Thai Cane and Sugar Corporation has managed toauction off the entire 400,000 mt allocated every year under the Quota Bauction process for raw exports. The sixth tender awarded 76,333 mt or 19% ofthe total allocation.

After this tender was concluded, the total amount awarded for theJuly-September shipment was 133,333 mt, comprising 95,851 mt of HiPoland 37,482 mt of J-Spec.

Alvean was awarded 12,000 mt of J-Spec for shipping from July 1 toSeptember 15 at 72 points above July (N) New York No.11 raw sugar futures.

Bunge was awarded the remaining 16,482 mt of J-Spec for shipping fromJuly 1 to September 15 at a 72 points premium to July (N) New York No.11 rawsugar futures.

The quota B tender awarded price for J-Spec was lower than offers heardin the market at July (N) plus 95 points for July 1 to September 15 shipment.

Bunge was awarded 47,851 mt of HiPol for shipping July 1 to September 15at 58 points above July (N) New York No.11 raw sugar futures.

The Thai HiPol quota B tender award prices pushed down premiums forPlatts Thai HiPol forward curve assessments Tuesday.

The Thai HiPol July-September 15 assessment was down 6 points Tuesday to58 points over July (N), in line with the awarded price.

The Thai cash premiums have been under pressure due to a bumper Thai cropestimate. From October 1, 2017 to March 8, 2018 sugar production in Thailandrose 21% year on year to 9.9 million mt, while sugar production from canecrush was 19% higher at 92.6 million mt during the same period, according todata published by the Office of the Cane and Sugar Board.

In Thailand, production of raw sugar over October 1-March 8 was 7.4million mt, up a steep 27% year on year, while white sugar production grewjust 5% to 2.4 million mt. This extends the trend of higher proportion of rawsugar than in-season white sugar being produced this season compared with lastseason. The raw/white mix of 75/25 was much higher than 70/30 a year earlier,according to S&P Global Analytics data.

The Thai Quota B tender, which covers a 400,000 mt raw sugar contract forthe year, is held by several trade houses and sold on behalf of the Thai Caneand Sugar Corporation, which has overall responsibility for pricing andselling raw sugar under this quota.

Half of the amount is allocated to international sugar brokers, and theother half to local millers for export.

--Srijan Kanoi,srijan.kanoi@spglobal.com

--Edited by Norazlina Juma'at, norazlina.jumaat@spglobal.com