THAILAND: Sugar industry seen earning US$6.12 billion this year
Published: 08/20/2012, 2:18:18 PM
The Office of the Cane and Sugar Board (OCSB) expects the industry to earn THB193 billion (US$6.12 billion) this year thanks to the rising price of sugar in the world market, according to Thailand's The Nation newspaper.
As a result, Thai sugarcane growers will enjoy a high final price in the new harvest season, which is forecast to produce 99 million tonnes. However, drought could affect production.
Prasert Tapaneeyangkul, OCSB secretary-general, said the initial assessment was that income for the industry for the 2011/12 harvest season would reach THB193 billion, compared with THB180 billion last year. Of the total, export revenue accounts for THB140 billion and the domestic market for the remainder. This revenue comes from milling 97.9 million tonnes of sugar cane to produce 10.2 million tonnes of sugar.
"The increased income will come from increasing sugar production and also raw sugar that sold in advance at 24 [US] cents per pound," Prasert said.
In addition, Thai sugar will not be affected by the euro crisis as there are import quota restrictions from non-European Union countries. Sugar from Thailand accounts for only 0.5% of the region's import volume.
Moreover, the US economic downtrend has resulted in low imports of sugar from Thailand, accounting for only 0.5% of its import volume.
Asia is the most important export market for Thai sugar, accounting for 90%. Of that total, Asean accounts for 40% and the Middle East for 7%.
Thailand's sugarcane industry has come under benefit sharing between sugar mills and growers. |It is forecast that the final price |of this year should reach THB1,065 per tonne for cane with content of 10% CCS (commercially recoverable sugar) compared with an initial price of THB1,000. Farmers will gain THB1,200 for CCS of 12%. In addition, farmers will receive financial support from the OCSB.
Thailand's sugarcane production in the 2012/13 harvest season is projected at 99.75 million tonnes. However, the rainfall level should be closely monitored, as drought would directly damage production. Areas at high risk of drought will be the lower North and the Northeast, the Central region and the East.
The OCSB has encouraged farmers to export more sugar to Asean countries, especially as the coming Asean Economic Community will create a bigger market for Thai sugar. Currently, Indonesia is the biggest importer of Thai sugar but its high import tariff of 38% has hampered exports. The office will closely monitor whether Jakarta will reduce the tariff rate to 5% in 2015, when the AEC kicks in.
Africa and the Middle East also have high export potential as their sugar consumption is rising in line with their growing economies.