Amid the low sugarcane production estimation and with the new export regulations announced this week, sugar export is likely to come down, reported Bangkok Post.
The Thai Sugar Millers Corp anticipates a substantial drop in sugar production, with estimates suggesting a reduction to 7-8 million tonnes in the 2023-24 crop, down from the 11 million tonnes in the previous season. This projection may lead to a decline in exports, expected to fall to 4-5 million tonnes in the next year, compared to the 7 million tonnes initially anticipated for 2023. Rangsit Hiangrat, the director of the Thai Sugar Millers Corp, stated these concerning figures, which have worsened since early September when he initially estimated output at approximately 9 million tonnes for 2023-24 and exports at 6 million tonnes, compared to the initial 8 million-tonne forecast for 2023.
Compounding the industry’s challenges, a recent government decision on Tuesday designated sugar as a controlled commodity. This measure aims to ensure domestic supplies and control inflation, and it will be in effect for one year. As with other controlled goods, this means that any changes in retail sugar prices or exports of one tonne or more will require approval from a regulatory panel. Rangsit Hiangrat expressed concerns that this move could lead to delays in fulfilling sugar delivery contracts that have already been established on the futures market. He remarked that “exports will be affected, and the industry will be hurt, including millers and cane farmers, as long as the government is slow to clear up uncertainties. If exporting sugar becomes more difficult, it will disrupt global supply and the futures contracts we’ve already committed to.”
Furthermore, cane growers across the country have voiced their opposition to the government’s decision, planning to protest against it.