After a further surge in Brazilian exports in the last season to about eight million tonnes raw value from 7.5 million tonnes in the previous year, Australian traders are rummaging among increasingly gloomy signs.

They are wary of an unusual buildup of surplus sugar stocks in Brazil which could divert sugar into export markets earlier this crushing season than usual.

And they fear that markets such as Singapore have been permanently lost to higher quality Brazilian raws.

"There is a fear, whether it will prove to be well-grounded or not, that Brazil will have the capacity to export even more sugar in the coming 12 months," said one Australian trader, who did not wish to be named. "That's why the (world) price is down where it is."

Still, Australian competitors see conflicting signs on Brazil's notoriously difficult to read sugarproduction.

Most of Brazil's current stocks are bagged and not able to be exported because of the cost of de-bagging. They also pose quality issues for the export market.

And new season sugar will also have to compete with soybeans to get through the ports.

But unlike the start of most seasons where Brazil's initial sugar production is diverted to domestic consumption, this year Australian traders see a potentially earlier than usual entry by new season Brazilian sugar to the export battleground."

Even before the Brazilian crushing season gets properly underway, Australian traders believe Brazilian sugar is floating around Asia in search of markets.

Recent freight inquiries to Black Sea ports for Russia were for loading out of both Brazil and Thailand, the trader said."

High premiums bid and offered for prompt shipments last week were another sign of much prompt sugar around.

The recent comment by Queensland Sugar Corp (QSC) researcher Owen Crees that Australia had lost the important markets ofSingapore and Dubai and was under threat from competing sugar of superior quality came as no surprise, the trader said.

Sugar which had captured the Singapore market, which took 121,400 tonnes of Australian raws in the year to June 30 1998, appeared to be of higher-quality Brazilian style, other sources said.

Brazil's production of high-quality crystal sugar of 99.7 percent-plus polarisation now leaves Australia wondering whether Singapore has been permanently lost, with Brazilian quality overpowering Australian freight advantages in Asian markets.

The attraction of quality to Asian raw sugar importers is simple and direct. As raw sugar quality rises refining costs fall.

But quality cannot be quickly changed, requiring new processes and improvements down to the grassroots of canegrowing.

As Australian sugar ponders its suddenly bleak future, Brazil's crushing season in the dominant centre/South is about to start.

Some smaller mills have already begun crushing. Major mills are expected to startcrushing later in April.