But the impact of the news was not strong enough to push prices up as traders said sugar from Brazil and Australia also stood a good chance of being bought in the tender, details of which are yet to be released. "The news helped underpin premiums which could otherwise have fallen without the fresh lead. We expect more details in two weeks ... It did not boost premiums much because basically, the sugar market needs much more world demand," a Singapore trader said.

"Moreover, Thailand might not be the only viable origin. It has a freight advantage, no doubt. But Brazil and Australia will surely price their products very aggressively," he said. Thailand is believed to hold a sizeable amount of raw sugar in warehouses while it has only small amount of white sugar left for sales.

"Ifthe price is right, then there are incentives to remelt raw sugar to produce whites. But I doubt if that will be the case," said an executive from a major Japanese trading firm. Some traders treated the news of possible purchase of 500,000 tonnes of raw sugar by Indonesia with scepticism.