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SUGAR
VICHAYA PITSUWAN
The government's initiative to raise the domestic price of sugar has encouraged some unethical sugar traders to illegally disguise their export quotas as domestic lots to boost profits. Damri Sukhotanang, the deputy industry permanent secretary and chairman of the Office of the Cane and Sugar Board (OCSB), said such illegal activity has been increasing since the government decided to increase the domestic sugar price five baht per kilogramme or 37%.
''Some merchants are shipping their export quota across the border, only to smuggle the sugar back into the country to be sold at the higher domestic price,'' Mr Damri said.
The price of domestic refined sugar is currently 23.50 baht per kilogramme, compared with export prices of around 10 baht per kilogramme.
Thikha Khunnawat, Director General of the Thai Sugar Millers Corporation Limited, said the price difference has persuaded traders to smuggle.
''There is no question, the smugglers are encouraged by a higher margin in domestic price. In fact, the operations are relatively small in volume, but the practice will affect domestic sugar quotas,'' Mr Thikha said.
He expressed confidence that sugar mills were uninvolved in the illegal practice, as most had greater concerns about selling their existing domestic sugar stocks.
Since last year, the OCSB has reported that up to 1.6 million sacks or 1.6 billion kilogrammes of sugar for domestic consumption are left in storage. OCSB has allocated 19 million sacks of sugar for domestic consumption this year. The price hike and a more health-conscious lifestyle are expected to push domestic sugar consumption below the allocated number.
Mr Thikha said smuggling could lead to domestic glut in the market.
In a bid to counter smuggling operations, an OCSB committee has assigned the Counter Sugar Smuggling Working Committee to cooperate with national police and the Customs Department to impose stricter surveillance measures to control sugar smuggling.
Sources from the OCSB revealed that at least 165 sacks of smuggled sugar have been detected in Rayong province and Tha Tian pier in Bangkok.
The OCSB has ordered a suspension of cross-border sugar trading in 10 border areas with Cambodia, Laos and Burma.
In addition, OCSB will revoke trading licences from any export traders found to be supporting the smuggling operation.
According to Mr. Thikha, the three sugar associations have suggested additional measures to control the smuggling.
They suggest that the custom department employ more personnel to better monitor cross border transactions, provide higher bounties for smuggling arrests and order OCSB provincial offices to monitor sugar trading activities.
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