Thailand’s sugar production falls due to drought

Thailand’s sugar cane output declined in the 2023-24 crop year, resulting from severe drought, which may affect sugar supply in the global market, says the Office of the Cane and Sugar Board (OCSB).

The country is the world’s second-largest sugar exporter after Brazil, meaning a drop in production could pressure the global market. “Our sugar cane harvests fell by 11.7 million tonnes, down from 93.9 million tonnes in the 2022-23 crop year,” said Verasak Kwanmuang, a farmers’ representative who sits on the board.

In the 2023-24 crop year, farmers delivered a total of 82.2 million tonnes of cane for crushing at sugar factories, with 70% fresh sugar cane and the remainder burned cane.

“Drought caused a water shortage, which dealt a blow to sugar cane plantation in Thailand,” said Mr Verasak.

Some 57 sugar mills produced 8.77 million tonnes of sugar and 3.55 tonnes of molasses in the 2023-24 crop year.

The amount of sugar tallied 107 kilogrammes per tonne of sugar cane, with a commercial cane sugar sweetness level of 12.35.

According to the OCSB, global sugar prices have decreased to 19 cents per pound, down from 25 cents per pound, following higher cane supplies from Brazil and India when the global economy was sluggish, , decreasing sugar demand. The board is worried if the global price continues to decrease or remains low, it will affect its calculation of sugar prices in the 2024-25 crop year, which are initially estimated in a range of 25.31-27.35 cents per pound.

“Our estimate of the final prices may change,” said Mr Verasak.

“This will affect domestic sugar prices and contributions to the sugar cane fund, which is struggling with a liquidity problem. Sugar factory owners will also be affected.”

The OCSB anticipates an increase in sugar cane production for the 2024-25 crop year, as farmers are likely to switch from cassava to sugar cane cultivation because of higher prices.

Tags: sugar, Thailand