Wilmar seen sole buyer of record ICE raw sugar delivery

By Chris Prentice

NEW YORK (Reuters) - Wilmar International Ltd has bought a record 1.9 million tonnes of raw sugar against the May ICE Futures U.S. contract, U.S. traders said, in an apparent bet on Asian demand and the first world supply deficit in years.

The Singapore-based agricultural firm is seen as the sole buyer of 37,606 lots of sugar expected against the May contract that expired on Thursday worth $546.7 million, U.S. traders said.

Wilmar could not be reached immediately for comment due to the late hour in Singapore. The exchange will publish the official results on Friday.

That would set a new record for deliveries against the contract, according to exchange records dating back to 1989.

It also marks the Singapore merchant's biggest play in an ICE delivery since its first exchange purchase in March 2013 and the company's third time being a sole buyer. The first time, the company scooped up about 153,000 tonnes.

"It's massive. This could make history as one of the greatest physical trades ever," said Nick Gentile, managing partner of commodity trading advisor NickJen capital in New York.

The delivery came in at the high end of traders' expectations that ranged from 1.5 million tonnes to more than 2 million tonnes.

The trade was divided over the implications of the delivery on prices, with the battle playing out in wild spread gyrations on Thursday. A handful of trade houses were expected to deliver the sugar from Brazil and Central American origins.

Wilmar International Ltd sounded a bullish call over reduced production in much watched importer China and weather risks from El Nino.

"There are some factors that point to higher prices, but at 13.50 and higher there's been a wall of selling," he added.

Prices are down a third since last July and hit six-year lows below 12 cents a lb last month. The May ICE contract closed down 0.11 cent, or 0.8 percent, at 12.98 cents a lb on its last day of trade.

Traders worry that even a marginal price recovery could lead India to unleash large inventories on the market, just as the cane crush in top producer and exporter Brazil gets under way.

Large deliveries against the exchange contract are often deemed bearish for prices, with the exchange seen as the buyer of last resort.

(Additional reporting by Marcy Nicholson in New York and David Brough in London; editing by Peter Galloway and Ted Botha)