THAILAND: ISO says spreads key to how surplus will play out
Published: 04/12/2018, 7:27:46 AM
The International Sugar Organisation told the 8th Africa Sugar conference held this week in Nairobi, Kenya that the key to managing Thailand's record cane and raw sugar output during 2017/18 is the raw and white spreads, reports Sugaronline.
With more than 120 million metric tonnes of cane processed, more than 70% of it into raws, ISO senior economist Peter de Klerk says the remelt programme must be of record size and done in record time in order to market this record production in an extremely bear market because there are no regional markets that can absorb 9 million tonnes of raws.
"The key is raw and white spreads," he said. Assuming no delivery from the upcoming ICE May raws expiry, there could be delivery in October when stores will need to be cleaned out ahead of the next crop.
"The Thai problem (for the bear market) won't disappear, so that sugar will be rolled down the board, where it meets the Oct/Mar spread - currently at around 120 points, wider today than all of the last Oct/March spreads during 2016/17," said de Klerk.