SINGAPORE: Thai white sugar premiums held steady this week but could strengthen on rising demand before the Muslim fasting month of Ramadan, while China and Malaysia are seen chasing raw sugar from Brazil, dealers said on Tuesday.

Thai whites were offered at premiums of $25 to $30 to front-month August contract, unchanged from last week.

A rise in the premiums between London white futures and New York raws to more than $100 also indicates strong demand for whites, they said.

“The one thing that stands out in the gloom is August whites, with the premium at $133 a tonne on Friday, up from $109.50 on May 1, or an increase of $23.50 over the month,” said Tom McNeill, director of Green Pool, a commodities analyst based in Brisbane.

“White sugar has seen strength mid-year in the past 2-3 years, and the surprising thing is that would still occur in a year with a large surplus coming on line.”

Dealers noted buying interest from the Middle East before Ramadan starts in July, when fasting in the day is followed by feasting in the evening, as refiners ramp up production to exploit the favourable whites-over-raw premiums – a measure of refining profitability.

“People are rushing to buy for Ramadan. But in raw sugar, you will see people comparing Thai and Brazilian raws. You can buy Thai raws at 195 points premiums now, but I don’t see bids, even at 180 points,” said a dealer in Bangkok.

Other dealers quoted the premiums for Thai high polarisation, or hipol, raw sugar at 200 points to New York’s July, down from as high as 220 points last week – their highest since August last year.

China was in the market to buy Brazilian raw sugar, partly due to lower premiums of between zero and 10 points to New York futures, while Malaysia was also chasing some cargoes, said dealers.

China imported 810,345 tonnes of sugar in January-April period, up 242.16 per cent from a year ago.

“Thai premiums are still high, so it’s hard to sell. China is buying Brazilian, and we also heard that Malaysia are buying some cargoes. I am still trying to get more details,” said a dealer in Singapore.

“The high whites premiums over raws encourage remelting too.”

WEEKAHEAD, WHITE SUGAR FROM INDIA AND PAKISTAN

Thai raw sugar premiums could slip next week if demand fails to improve, but white sugar could strengthen despite more offers from India, which is selling excess stocks.

Indian whites were offered at $525 to $540, hardly changed from last week. Neighbouring Pakistan also offered white sugar, which was quoted by some dealers in Singapore at $550 a tonne, down from $600 two weeks ago.

The July raw sugar contract on the ICE fell to 18.86 cents, the lowest intra-day price since August 2010, and ended down 0.19 cent at 18.90 cents per lb on Monday due to bumper global supplies.

London futures resume trading on Wednesday after a holiday to celebrate Queen Elizabeth’s 60th year on the throne.