Indonesias first transparent commodities tender last week, which Rutledge described as "very professionally conducted", ended up at a total of about 50,000 tonnes of raws, in addition to white sugar, he told Reuters.

Indonesian officials said on July 30 that the country had bought 30,000 tonnes of raw sugar and 202,000 tonnes of white sugar in the tender. They did not disclose origins.

But the total raws quantity bought in the tender had been increased from the 30,000 tonne mark, Rutledge said.

"Clearly its something that well have a look at, "Rutledge said of next weeks bigger Indonesian tender for 500,000 tonnes of raws but he declined to say if QSC would bid.

Indonesias tender last week was "very competitive", with sugar on offer from a number of parties. He declinedto disclose prices for the Australian sugar.

Some significant offtake was occurring into some traditional markets in Asia at present, notably Indonesia and the Philippines, he said. "There is some activity there."

But whether the Indonesian tender signalled an upturn in the Asian market was difficult to judge, Rutledge said.

The tender was not seen as a watershed in the structure of the Indonesian market but rather "a clarification".

With 1998 the first year bearing the full effects of financial instability in Asia, QSCs marketing campaign was a little more difficult than usual, he said.

But group sales were very well developed and ahead of the usual position at this time of year. Earlier this week QSC announced it had loaded the second-largest raw sugar shipment ever to leave Australia aboard the Canada-bound MV Transworld.

"Our pricing activity has been well ahead of the historical norm for all of this calendar year. Were pretty well placed (in a difficult market)," Rutledge said.

QSC wasexpecting to sell all of its sugar from the 1998 season into previously-held markets, although there could be some shift in relativities.

Thailands drought-affected sugar crop this year was making QSCs job easier, by offsetting some regional weakness, because lower supply from Thailand was creating opportunities for Australia as the other major supplier in the region, he said.

Rutledge said the weak Australian dollar had offset lower US dollar prices for QSC. Even though prices in US dollars had improved from the lows of two to three months ago, the QSC Chief described them as still "on the low side".

The raw sugar market remained under some pressure with heavy availability from South America and some doubt about major traditional points of offtake.

Rutledge said Queenslands 1998 raw sugar forecast might have to be revised down because of a reduction of sugar content in the cane as a result of wet weather associated with the developing La Nina event across northern Australia.

The June-Decemberharvesting and crushing season had not got off to as good a start as had been hoped, he said.

"Its not dramatic but it has caused some problems in some districts. We would have preferred drier weather."

But QSC was still forecasting production of 5.25 million tonnes in 1998, slightly more than the record 5.22 million tonnes last year.

He said there was still no evidence of sugar smut disease in Queensland after its discovery in the Ord irrigation project of Western Australia.

If smut did spread to Queensland it would not have an immediate effect, although medium-term effects could be "quite dramatic" on output through its large impact on yield, he said.