Except for some sugar offtakes to the Philippines, the market lacked fresh leads, they said.

Thailand is scheduled to ship around 44,700 tonnes of raw sugar to the Philippines between last week and the end of August, according to trade sources.

Market talk that South Korea might have bought or was in the process of buying one or two cargoes of raw sugar from Guatemala depressed the market, however.

Thai industry sources said they were concerned that the recent drop in freight rates would trigger a bigger influx of South American sugar into Asia.

"Although it is nothing new that South Korea buys South American sugar, the rumoured purchases came at a time when the Thai industry is very insecure due to various reasons," said a marketing executive of one sugar firm.

"The fact that Thai sugar barely made it to Indonesia's major tenders recently but Brazil's sugar had already rattled the market. And these all came at the time when the demand in Asia is falling," he said.

South American countries can normally produce sugar at lower cost compared with Thailand, a major supplier of sugar in Asia.

However, it was the high freight rate that usually discouraged Asian countries from buying South American origins.

Trade sources estimated that there was around 300,000-400,000 tonnes of Thai raw sugar still unsold at the moment.

"But honestly I don't see any substantial demand on the horizon to absorb this amount of sugar this year. It is likely to be carried over and depress premiums next year," said a trader with a major European trading firm.

"There might be more orders from the Philippines. But, again, Thai sugar might have to compete with other origin although it enjoys tariff privilege," he said.

Thai raw premiums for prompt shipment were offered at 100 points per pound over New York's Coffee Sugar and Cocoa Exchange (CSCE) on FOB basis.

January/March and March/July were quoted at 65/75 points over New York in the same basis.

On the local front, the Thai government scrambled to settle the debt restructuring issue in the industry to make sure that it would have the liquidity to operate as the new crushing season (November-May) approached.

Government sources said the industry will need around 30 billion baht in the upcoming season.

The debt restructuring, which is aimed at persuading banks to lend to the sector again, should be completed by October, they said.