Thailand Sugar Mills Plan to Boost Sugar Quota for Global Export

3 Sugar Mill Association has recently informed that, during the cane extraction season between 2020 and 2021, sugar mills nationwide accepted a total of 66.67 million tons of cane for extraction. The number served both local consumption and overseas export. However, the Association expected that the number of cane for extraction between 2021 and 2022 would increase upon official announcement of higher prices to purchase harvested cane. This will make local cane growers more confident to increase cane growing as domestic sugar consumption has lately decreased, affecting many local sugar mills.

Mr. Pramote Witthayasuk, the chairman of 3 Sugar Mill Association, announced that a total of 57 sugar mills throughout Thailand, in accordance with a survey regarding the amount of sugar produced at the initial harvest period of 2021/2022, would receive 90 million tons of harvested cane. In the previous period, 66.67 million tons of cane were sent for extraction at sugar mills. The main factor for the increasing number of cane for extraction this year includes ideal climate for cane growing, particularly more rains. In addition, local cane growers who were paid 1,000 Baht per a ton of cane necessarily had harvested cane of which sweetness was at 10 CCS as it is the guaranteed value. Also, public sectors encouraged harvesting cane by fresh cutting to save environment. Doing so will enable local cane growers to earn more. The 3 Sugar Mill Association even affirmed that the post-Covid 19 consumption of sugar would be better since, at present, many sugar mills need to adjust their sugar export plans by sending more products overseas due to sluggish economic situation in Thailand which results in less purchasing power despite more product demands.

In terms of sugar prices in the world market, there is a chance of improvement even though Thailand was ranked the 2nd on sugar export. It is projected that amount of cane will increase since Brazil, which was ranked the 1st on the world sugar export, is currently facing weather problems causing less cane production than before. Moreover, cane harvested in Brazil is planned for more ethanol production. As a result, the situations reflect better conditions of sugar prices in the world market.

While it was calculated that sugar consumption would reach 2.4 million tons during the production period of 2021-2022 (October, 2020 – September, 2021), the number might drop to 2.2 million tons. After the 2nd and 3rd waves of pandemic, it was found that, between October, 2020, and May, 2021, the amount of sugar sold domestically was only 1.5 million tons. Mr. Pramote therefore concluded that sugar mills had already provided high amount of sugar to serve consumers’ needs so that shortage of sugar would not take place. Nonetheless, owing to the spread of Covid-19, consumption power dropped and sugar consumption was lower than expected in Thailand. The amount of sugar left in the country will be exported to other countries to promote local cane and sugar industries.