April 8, 2020
S & P Global Platts | https://bit.ly/2VXyoOT
Singapore — Thai sugar exports are unlikely to be impacted by the country's nationwide night curfew as the transportation of sugar from mills to ports has been classified as an essential service, Thai trade sources said Wednesday.
"Workers moving agricultural goods like rice or sugar from one place to another are still able to do so, but they will require official documentation from their companies to justify," a source close to a Thai mill said.
The Thai government imposed a nationwide 10 pm-4 am curfew last Friday as part of a ramp-up in restrictions to combat the spread of COVID-19.
Thai ports are continuing to function normally, but some sugar traders were heard to have experienced processing delays in meeting shipping and government documentation requirements amid widespread work from home arrangements.
"There were some teething issues with the documentation processing, but things are getting better. Previously, some of the shipping lines could not process the paperwork efficiently as they are working from home," a Singapore-based trader said.
EXPORT CURBS UNLIKELY
While neighboring Malaysia and Vietnam have suspended certain agricultural exports in a bid to ensure sufficient domestic food supply amid the COVID-19 pandemic, market participants said similar restrictions on Thai sugar appeared unlikely.
Domestic consumption at around 2.4 million mt/year equates to only around 20%-30% of Thailand's total sugar production, which based on current data would leave 5 million-6 million mt of sugar available for export in 2020.
"There is enough sugar, so we don't think the government would introduce any form of export restriction," a Thai producer source said.
However, the export situation could turn bleak if Thailand or major buyers of Thai sugar were to impose nationwide lockdowns that curtail sugar shipments going forward, she added.
PIVOT TO CHEAPER ORIGINS
A strong uptick in Thai cash values since the start of the year was due to a sharp year-on-year decline in supply amid a widespread drought in the country, market sources said.
Thai 45i refined sugar cash premiums for prompt shipments in containers have soared 220% since January 2 to stand at $67/mt over London No. 5 May futures Tuesday, S&P Global Platts data showed.
"Thai [sugar] exports have been slow this year not because of COVID-19, but due to the supply shortage and unattractive prices. Buyers are just looking for sugar from cheaper origins," a trader in Hong Kong said.