MIND Hold Talks with OCSB to Develop Guidelines to Support Biomass Electricity to Enhance Product Processing 

The Minister of Industry has proposed two strategies to encourage farmers to harvest fresh cane, emphasizing the need to increase income for Thailand’s sugar and cane industry. The Ministry of Agriculture and Cooperatives anticipated that the 2024/25 production season would yield 92 million tons, reflecting an 11.96% increase. However, the global sugar stockpile is expected to keep sugar prices stable at 21 cents per pound in the second half of 2024, which may pressure domestic cane prices to drop to 1,200 baht, a decrease of 15.49%. 

Mr. Ekanat Promphan, the Minister of Industry, revealed this after representatives from four cane farmer organizations—comprising The North-Isan Sugarcane Planters Association, Thailand Sugarcane Planters Federation, The Association of Cane Farmers of Thailand, and The Unity of Thailand Sugarcane Planters—met with him on September 24, 2024. During the meeting, they sought updates on support initiatives for cane farmers to harvest high-quality fresh cane to help reduce PM 2.5 dust pollution during the 2023/2024 production season. 

There are concerns regarding the management of the sugar and cane industry, and two key guidelines have been proposed as follows: 

1. Sugar Production Efficiency: Cane farmers must produce and deliver high-quality fresh cane to sugar mills, which, in turn, must improve their processing efficiency to meet standard output levels. This approach aims to maximize revenue for the sugar and cane industry. If production efficiency declines, it will lead to a decrease in sugar output, subsequently reducing both farmers’ incomes and cane prices. Furthermore, if there are calls for government subsidies on cane prices, it would violate international trade regulations. 

2. Financial Support to Reduce Fresh Cane Cutting Costs: Financial assistance should be provided to help reduce the costs of harvesting high-quality fresh cane. This will give cane farmers time to adapt and adjust their cultivation practices to better utilize agricultural machinery. Additionally, drought conditions may lead to lower cane prices this year compared to last year. The Minister of Industry instructed the Office of The Cane and Sugar Board (OCSB) to consult with relevant agencies to explore the feasibility of purchasing electricity from plants that generate power from cane leaves and tops. 

This approach aims to encourage cane farmers to recognize the value and benefits of cane leaves and tops. By doing so, it will help reduce the burning of cane, contributing to environmental preservation and minimizing the impact on nearby communities and residents. 

The Thai Sugar and Bio-Energy Producers Association seeks support for a plan to purchase electricity from biomass power plants that utilize leftover cane leaves and tops. Additionally, it advocated for mechanisms to promote domestic ethanol use to enhance the country’s energy stability. This initiative is partially a broader effort to encourage environmentally friendly energy practices while also increasing income for cane farmers through the utilization of molasses for domestic ethanol production.  

“I realize the difficulties faced by cane farmers. The use of cane harvesting machines or hiring labor for cutting fresh cane both incur production costs. We must focus on reducing these production costs for farmers who harvest high-quality fresh cane. I have instructed the OCSB to discuss with sugar mills the establishment of guidelines and methods to enhance production efficiency before the start of the 2024/2025 production season. This aims to increase revenue within the sugar and cane industry. Additionally, I have asked the OCSB to explore ways to compensate farmers who supply fresh cane to the mills, and part of this could involve using the income generated from selling cane leaves to offset these costs,” addressed Mr. Ekanat. 

A report from the OCSB indicates that during the first half of 2024, the average global sugar price stood at 20 cents per pound, marking a 16.67% decrease from 24 cents per pound in 2023. This decline is attributed to a significant sugar stockpile in the global market. Brazil, the world’s largest sugar producer, has seen an increase in sugar production and has raised its sugar output ratio. Additionally, Thailand’s sugar production for the 2023/2024 season reached 8.81 million tons, an increase of 12.80% compared to the forecasted 7.81 million tons. 

Regarding the second half of 2024, global sugar prices are expected to remain at or below 21 cents per pound. This outlook is influenced by Brazil’s ability to increase sugar production. Additionally, if India revises its policy to allow normal sugar exports, this will further contribute to the global sugar stockpile. In Thailand, it is anticipated that the 2024/2025 production season will yield 92 million tons of cane, reflecting an 11.96% increase compared to the previous season’s production of 82.17 million tons. 

Earlier, Mr. Wirit Wisetsinth, Secretary-General of the OCSB, stated that the OCSB has preliminarily calculated the domestic cane price for the 2024/2025 production season. If global sugar prices remain at 21 cents per pound, the average cane price is expected to be around 1,200 baht per ton, reflecting a 15.49% decrease from the previous season, which recorded a historic high of 1,420 baht per ton. 

However, several other factors also influence the calculation of domestic cane prices. In the 2024/2025 production season, the OCSB plans to implement strategies to enhance production efficiency, ensuring that cane farmers achieve better yields and that mills produce high-quality sugar. This approach is expected to help drive up domestic cane prices in the future.