Thailand’s Sugar Industry to Step Ahead without Fear of Shortage

Office of Cane and Sugar Board (OCSB), the Ministry of Industry, has recently confirmed that no shortage of sugar for domestic consumption would take place in Thailand as up to 2.5 million tons or around 25 million sacks of sugar were allocated. Even so, the officials are closely monitoring the impact of Covid-19 to local economy, expecting that sugar consumption would reach to only 2.4 million tons, but more 50.3% of cane were provided to refineries than the previous year.

The OCSB’s Director General Mr. Ekapat Wangsuwan revealed that the OCSB was confident of the existing amount of sugar for local consumption from 2019 to 2020, or 2.5 million tons or 25 sacks, because it served the needs of Thai people. As the present Covid-19 pandemic is affecting local economy in the country, sugar consumption in Thailand may be as low as 2.4 million tons.

“The OCSB still believes that sugar products in this year are certainly sufficient for local consumption as many big retailers or convenient stores are well prepared to sell them. Should more sugar is needed, we’re able to manage by using products in storage or those available for export to serve domestic need instead,” explained Mr. Ekapat.

Mr. Ekapat Wangsuwan, OCSB’s Director General

Regarding the present period of cane extraction (from 2019 to 2020), since December, 2019, about 74.9 million tons of cane, around 56 million tons or 42-43% less than the last period, have been extracted while sugar products have reached around 8.2-8.4 million tons. 56 sugar refineries already started extraction, but Ekaluck Sugar Refinery was the only one to start on March. The latest extraction saw 50.3% cane extracted, more amount than last year when only 38-39% cane was extracted at local refineries. This can help solve problems on burning cane farms which causes huge impact on the environment as it worsens air pollution due to the PM 2.5 smog.

The Director of Office of the Cane and Sugar Fund Mr. Weerasak Khuanmuang said that the government had allocated 25 million sacks of sugar (2.5 million tons) for domestic consumption and the other 2 million tons for storage. Therefore, no shortage of sugar will take place at all because sugar consumption this year will slow down due to current economic trends. At the same time, regarding the world sugar market, Brazil began selling more sugar because of low oil prices that allow the country to reduce sugar for ethanol production.

“Global prices of raw sugar are 11 cents per pound on average. At the beginning of this year, the average price was 15 cents per pound. Now, due to the viral pandemic worldwide, oil prices are low and Brazil, which was ranked the first exporter, has reduced sugar for ethanol production but turn to export it in low prices. The country gained benefits from severe currency depreciation from 3.8 reals per a US dollars to 5.11 reals per a US dollar. If the situation remains for quite some time, cane prices will be affected in the next seasons once again,” explained Mr. Weerasak.

Regarding agricultural products, the advisor to the Minister of Agriculture and Cooperatives Mr. Alongkorn Polabutr revealed that the viral pandemic was currently affecting confidence of consumers, thus panic of food shortage and needs for food stocking. The Minister of Agriculture and Cooperatives Mr. Chalermchai Sri-on assured that no product shortage would take place in Thailand at all because he had asked all offices supervised by the Ministry to monitor production and administration of agricultural products closely while promoting the increase of those products in on-line channels. At the same time, there should be preparation for labor migration due to closing of companies and offices and the Department of Irrigation will mainly recruit more workforces.

The Ministry of Agriculture and Cooperatives already asked the Director General of the Office of Agricultural Economy Mr. Rapeepat Chantarasriwong to monitor, follow-up and work collaboratively with other governmental offices, namely the Ministry of Commerce and private sectors. Following the meeting with the Industrial Council of Thailand and the Thai Chamber of Commerce, there may not be shortage of products and commodities for consumption as more production can be done. At present, 60% of products are being made.

In summary, speculation of supply chains on situation of agricultural products confirmed that no shortage of products would affect local consumption. In case of 3-month or 6-month or 1-year lockdown in Thailand or in other countries, there will still be some agricultural products available this year, particularly rice, fishery goods, livestock, casava, coconut, oil palm and cane. Amid the Covid-19 contagion, all of the said products will certainly be sufficient for local consumption.

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