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* Premiums for cash Thai white sugar sharply up this week
* Adverse weather erodes Chinese sugar production outlook
By David Brough
LONDON, Oct 6 (Reuters) - White sugar demand has surged as high domestic prices fuelled rampant demand from China while a strong flow of supplies into Sudan has also helped to tighten the market.
Traders said buoyant demand has helped keep physical premiums at strong levels despite a rise in white sugar futures to a seven-month high of $388.00 per tonne on Monday.
Thai whites were quoted at $45 over December London white sugar futures this week, up from $35 a week ago.
ICE December white sugar futures were up 70 cents or 0.2 percent at $387.50 per tonne on Tuesday, 7 percent up from a week ago after a sharp futures rally last week.
Sugar futures surged on news of a gasoline price increase in Brazil, boosting demand for cane-based ethanol biofuel, combined with wet weather in top grower Brazil hampering cane harvesting.
Adverse weather in China is expected to erode this season's sugar production and boost imports, stimulating the flow of whites via countries such as Thailand, Vietnam, Cambodia, Laos and Myanmar, several traders said.
Traders said they believed that some sellers in China were receiving around double the ICE white sugar futures price.
"Chinese demand is rampant," one London-based trader said.
Claudiu Covrig, a senior agriculture analyst with data provider Platts, said: "There is a shortage of whites in the world, due to demand from Asian countries."
He forecast a Chinese sugar deficit of about 6 million tonnes in 2015/16 (October/September), up from a deficit of around 4.5 million tonnes in 2014/15.
A Western analyst said: "The domestic price in China is encouraging the demand. The international futures rally is not going to stop that trade."
"Only a major correction in the domestic market will do that."
Traders also spoke of vigorous Sudanese buying, possibly for regional markets.
"Sudan still a bit of a mystery to most -- seems either to be a big portal to regional markets or a dumping ground for white sugar -- but either way, it is consuming at a rapid clip," one senior trade source said.
The rally in ICE white sugar futures has, however, put the brakes on physical white sugar demand from west and north Africa and the Middle East, traditional refined sugar markets.
(Reporting by David Brough; Editing by David Evans) ((David.Brough@thomsonreuters.com; 00442075428064; Reuters Messaging: david.brough.thomsonreuters.com@reuters.net))
* Adverse weather erodes Chinese sugar production outlook
By David Brough
LONDON, Oct 6 (Reuters) - White sugar demand has surged as high domestic prices fuelled rampant demand from China while a strong flow of supplies into Sudan has also helped to tighten the market.
Traders said buoyant demand has helped keep physical premiums at strong levels despite a rise in white sugar futures to a seven-month high of $388.00 per tonne on Monday.
Thai whites were quoted at $45 over December London white sugar futures this week, up from $35 a week ago.
ICE December white sugar futures were up 70 cents or 0.2 percent at $387.50 per tonne on Tuesday, 7 percent up from a week ago after a sharp futures rally last week.
Sugar futures surged on news of a gasoline price increase in Brazil, boosting demand for cane-based ethanol biofuel, combined with wet weather in top grower Brazil hampering cane harvesting.
Adverse weather in China is expected to erode this season's sugar production and boost imports, stimulating the flow of whites via countries such as Thailand, Vietnam, Cambodia, Laos and Myanmar, several traders said.
Traders said they believed that some sellers in China were receiving around double the ICE white sugar futures price.
"Chinese demand is rampant," one London-based trader said.
Claudiu Covrig, a senior agriculture analyst with data provider Platts, said: "There is a shortage of whites in the world, due to demand from Asian countries."
He forecast a Chinese sugar deficit of about 6 million tonnes in 2015/16 (October/September), up from a deficit of around 4.5 million tonnes in 2014/15.
A Western analyst said: "The domestic price in China is encouraging the demand. The international futures rally is not going to stop that trade."
"Only a major correction in the domestic market will do that."
Traders also spoke of vigorous Sudanese buying, possibly for regional markets.
"Sudan still a bit of a mystery to most -- seems either to be a big portal to regional markets or a dumping ground for white sugar -- but either way, it is consuming at a rapid clip," one senior trade source said.
The rally in ICE white sugar futures has, however, put the brakes on physical white sugar demand from west and north Africa and the Middle East, traditional refined sugar markets.
(Reporting by David Brough; Editing by David Evans) ((David.Brough@thomsonreuters.com; 00442075428064; Reuters Messaging: david.brough.thomsonreuters.com@reuters.net))
