Poor crops in Asia will tighten the global white-sugar market this season, helping maintain the premium that London futures command over New York in a bullish trend, according to researcher Kingsman. Export availability will fall by 3.5 million to 4 million metric tons in the 2016-17 season that started this month in most countries, Claudiu Covrig, a senior analyst at the unit of S&P Global Platts, said in an interview at a company event in London. The decrease in supplies will support the so-called white-sugar premium, which has traded above the 5-year average for most of the first half of 2016. “We see a steep decrease in export availability of whites,” Covrig said in a presentation for traders gathering in London for Sugar Week. “Why? Because Indian production was not good and because Thai production was not good.” Dry weather caused by the El Nino weather phenomenon hurt crops in India, potentially turning the world’s second-largest producer into a net-importer. The South Asian nation may need to bring in 2 million tons of sugar in 2016-17, Kelvin Chow, an analyst with Rabobank International in Singapore, said last week. Trader Louis Dreyfus Co. sees imports at 1 million tons. Dryness is also set to curb output in No. 2 exporter Thailand. Second Best While white sugar exports are set to fall to 18.7 million tons, availability of the raw kind will only suffer a small drop, Covrig said. That will help boost the premium that white sugar commands over the raw variety, which has dropped recently on speculation this year’s sugar rally will curb demand. Sugar is the second-best performer in the Bloomberg Commodity Index after zinc. “On the raw side, export availability should be there with a small drop,” Covrig said. “That’s why it’s bullish the white premium.” Sugar traders will start feeling the pinch from global shortages next year, according to Kingsman. Global trade flows will enter a deficit phase in the first quarter, when raw sugar export availability falls short of needs by about 480,000 tons, Covrig said. That will reverse a surplus of 800,000 to 1.2 million tons in the last three months of the year. While traders have been forecasting production shortfalls since last season, there have so far been sufficient stockpiles to keep import demand satisfied. With inventories relative to consumption set to fall below the critical level of 45 percent, according to the London-based International Sugar Organization, the market is set to tighten. The trade-flow deficit may still be smaller depending on the level and speed at which stockpiles are released by China, Covrig said. For now, the world’s largest raw sugar importer has said it will sell 350,000 tons of reserves to help ensure domestic supplies and stabilize prices, according to a statement from the National Development and Reform Commission. China’s destocking “won’t have a big impact on domestic prices but will eat into imports,” the analyst said.