Asian
sugar supplies are
expected to rise over the next week due to bigger-than-expected crops in Thailand and India, while major buyer Vietnam cuts back on new purchases,
traders said. The Vietnam Sugar and Sugarcane Association has asked the trade ministry to stop handing out sugar
import quotas because domestic stocks and
smuggled sugar were more than enough to meet domestic demand. "The smuggled sugar plus the stocks held by domestic refiners will result in a surplus of 300,000
tonne to 350,000 tonne," the official Vietnam News Agency said in a report this week.
The association estimated 450,000 tonne of white sugar had been smuggled into Vietnam so far this
year. One kg of smuggled sugar, often Thai brought through Cambodia, is sold at 8,000 dong ($0.50) per kg, compared with around 10,400 dong per kg for domestically refined sugar.
The Vietnamese government approved the import of 150,000 tonne of sugar in March, but no deals have been made, traders said, pointing to the impact of smuggled sugar.
Thailand, Asia’s largest sugar exporter, has had good rains in the past few months, fuelling predictions of a bigger-than-expected cane crop in 2006/07, which runs from October to September. "No official projection has been made, but traders and millers expect around 55 million tonne of cane this year due to favourable weather and attractive prices," a trader said.
Thailand produced 46.68 million tonne of cane in the current year. Thai exporters and traders are under pressure to sell in a bid to cut storage costs during periods of slack demand.
India’s sugar output is expected to rise to 22-23 million tonne in the 2006-07 crop year (October-September), up from 19.2 million tonne in the current season. Traders forecast India’s sugar exports in the year ending in September at close to one million tonne, mainly to Pakistan, Bangladesh and Sri Lanka. India has exported about 700,000 tonne of sugar since January, the bulk of it to Pakistan. Indonesia, which planned to issue import permits to buy white sugar in 2007, said it may do so earlier to give importers more time to plan their purchases. "We have yet to decide when it will be issued," said Diah Maulida, director general of foreign trade, adding it had to be discussed with the Indonesian sugar council. Indonesia was expected to import more raw sugar once a new 540,000-tonne white sugar mill started operations in August, said Yamin Rahman of the Indonesia Refined Sugar Association.
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