Thai sugar exports fell 24% on the month in July amid supply tightness forcing destination buyers to seek alternative origin cargoes that are more competitively priced, trade sources said Aug. 25.
Total sugar exports from Thailand in July was at 428,174 mt - comprising 204,761 mt of raw sugar, 26,908 mt of white sugar and 196,505 mt - compared to 559,938 mt for June shipments, data from Thai Sugar Millers Corporation (TSMC) showed.
Raw sugar export volumes between January to July were down almost 20%, year on year, at 2.7 million mt, compared to 3.36 million mt last year.
While Indonesia imports of Thai raw sugar from January to July 2020 were at a similar level to last year at 1.94 million mt, trade sources noted that Thai export sales into Indonesia would likely dampen further in the third and fourth quarter.
Indonesia is the top importer of Thai raw sugar and typically accounts for 60%-70% of total Thai raw sugar exports.
Due to a small Thai crop that has driven cash premiums to high levels, Indonesian buyers have switched their buying requirement to more competitively priced Indian and Brazilian cargoes.
According to a shipment report seen by Platts, Indonesia imported 404,947 mt of bulk raw sugar from India from January to Aug. 6 this year.
White and refined sugar for January-July shipments fell by 6%, year on year, to 1.8 million mt, according to TSMC data.
July shipments to Vietnam slumped by 32% on the month to 61,625 mt, compared to 89,850 mt in June and 101,530 mt in May.
The decline in exports to Vietnam was mainly attributed to a drop in domestic prices amid a strong import program in the first-half of 2020.
Vietnamese domestic white sugar price was heard around VND11,000-11,500/kg ($470-$500/mt), compared to VND13,000/kg ($560/mt) earlier this year.
Trade sources also noted that the surge in London No. 5 sugar futures price in recent weeks has also made Thai flat price unattractive for sales into Vietnam.
"Regional demand for white will be weak in Q3 as Philippines and Vietnam are importing less. We are also at the tail-end of the Thai crop so there is not much left to be exported," a Singapore-based trader said.
