| NEW YORK, Oct 10 (Reuters) - Physical sugar dealings should
stay buoyant on expectations for further Russian buying and anticipated
offtake from the Middle East and China over the next few months, brokers
said Tuesday.
But any upward push in indicative quotes for Brazilian spot raws FOB
Santos, seen for the moment at around 50-55 over CSCE March futures, may
be dampened by a robust rally in world prices. They were quoted around the
same levels last week.
Tuesday, CSCE March sugar was trading at 10.86 cents a lb at 1221 EDT,
up 0.40 cent, moving between 10.56 and its lifetime peak of 10.98 cents.
``The expectations are that the Russians are going to buy an enormous
amount of sugar,'' the trading director of a New York-based sugar house
said.
Buying by Russia, the world's top importer, was said to have zoomed to
more than 600,000 tonnes in the last two weeks as expensive Russian
domestic prices make it viable to import raws despite a stiff 40 percent
import tariff.
``It looks like there's been a lot of Russian offtake,'' a senior
broker for a major trading house said.
The Russian buying has taken place despite uncertainty over the
situation there and demands by the country's sugar producers for Moscow to
extend a 30 percent import tariff on whites to prevent a flood of imports
after Dec 16, when the tariff expires.
MARKET LOOKS TO MIDDLE EAST, CHINESE OFFTAKE
Sugar brokers were also looking toward expected seasonal purchases from
the Middle East and North Africa by countries like Egypt and Morocco
picking up cargoes ahead of the annual Ramadan fasting month.
The only damper would be the decision by Syria to temporarily pull out
of the sugar market until the start of 2001.
China is also seen stepping into the market early in 2001 to replenish
stocks drawn down this year after a crippling freeze hammered its cane
crop.
``The Chinese are asking around which is the reason why the Thai
premiums are so good,'' a trader said.
Industry sources in Bangkok have quoted Thai raw sugar bid premiums for
the May/July period at 85 points over New York CSCE prices.
Another source of expected nearby buying would be Bangladesh, which is
tendering on Oct 14 for 50,000 tonnes of 150 ICUMSA whites for
Oct/November shipment.
``For the first time in several years, you are seeing a futures market
and a physical market in sync. The futures market is reflecting strength
in the physical market,'' a broker said.
PREMIUMS SEEN GETTING HEMMED BY RALLY
Premiums for Brazilian spot raws, though, may find the going tough in
posting further gains after the robust rally seen in the sugar market.
Benchmark March soared to a contract peak of 10.98 cents and was
trading at 1200 EDT at 10.90 cents, up 0.44 on the day.
``I would think the premiums would hold steady at the least. I don't
think you're going to see them strengthen considering the rally we're
seeing,'' a long-time broker said. |