"Thai exporters have not been offering. They are getting worried that the crop could be much smaller than they estimated," said one trader. Thai exporters had sold forward contracts through to March shipment for about half the sugar they expected the country to produce in 2004/2005, traders said.
The industry has been revising down its production estimates since the crushing season began on November 23, reflecting expectations for a smaller 2004/05 crop due to poor rains since October.
Mills estimate the crop at between 48 and 50 million tonnes, down from the 55 million tonnes they forecast late last year.
US trading giant Cargill cut its estimate by 2 million tonnes to 52 million tonnes over the past week, and French trading house Sudden trimmed its forecast by 1 million tonnes to 52 million tonnes.
Traders and officials now expect the crushing season to end by March, more than a month than usual due to expectations for a smaller crop. The 2004/2005 harvest has been underway for over 2 months with Thailand's 46 mills crushing cane since November 23.