Indian sugar export offers have slowed due to weak international prices, while raw sugar from centre-south Brazil muscled out competition from Thai sugar as millers in the number two exporter were reluctant to sell.
Top sugar consumer India's decision this month to increase its sugar import duty was expected to discourage the sale of imported sugar on the domestic market.
The Indian authorities hope to keep domestic prices high so that millers can pay firm prices to growers, dealers said.
"Export supplies from India seem to have slowed," a senior Western analyst said, referring to the pace of Indian white sugar offered on the international market over the past week, coinciding with a fall in ICE raw sugar futures.
"As the international market comes down, it is less attractive to sell internationally," the analyst added.
Shipments from Brazil
Dealers said Thai industry was losing business to Brazil because Thai millers were reluctant to sell in the hope that prices would rise. Thai raw sugar was offered at a premium of 140 points over ICE October futures.
"Traders have been struggling to source Thai raw sugar and with the high physical premiums most of the buyers have been looking to Brazil to fill their needs," one trade source said.
Nominations of sugar vessels in July from the centre-south of Brazil, the world's top sugar producer and exporter, suggested steady demand from key markets such as China, which was buying on the dips, dealers said.
Offers of centre-south Brazilian raw sugar for July shipment this week were 12 points below ICE October futures, holding up better than expected as the Brazilian harvest neared its peak.
The spread between the Liffe August and October white sugar futures contracts remained high, at around $21 per tonne this week, buoyed by a fire last month in the main warehouse in Jeddah of United Sugar Co, a unit of Saudi food company Savola Group.
Dealers noted that the Dubai Al Khaleej refinery had ramped up activity.
