Sweetener for Seoul to return the favour

Sweetener for Seoul to return the favour

Thailand has abolished sugar import tariffs for South Korea in the hope that Seoul will return the favour.

Sirivuth Siamphakdee, chairman of the Thai Sugar Millers Corporation, said the government had already removed sugar from the "highly sensitive list" of products with a 1.22% import tariff under the implementation of the Asean-South Korea free-trade agreement.

"We have informed South Korea and expect them to cut the import tariff on Thai sugar from 3% to zero in return," he said.

Traders said the move was expected to encourage Seoul to import more sugar from Thailand, which shares the market with Australia, which has a zero-tariff privilege from South Korea.

Mr Sirivuth said Thailand sought to persuade Seoul to cut import duty so that it could boost annual sugar exports to South Korea, which imports 500,000 tonnes of sugar from Thailand, mostly raw sugar.

"The tariff cut is unlikely to have any impact on the Thai sugar industry because South Korea does not produce any sugar and has to import almost 100% to meet demand, so there is no chance of Korean sugar being dumped on Thailand," said a trader.

Thailand, the world's second-biggest sugar exporter after Brazil, started its 2014-15 sugar crop in November and the crushing period is expected to run until late April.

The Office of the Cane and Sugar Board, which oversees the sugar industry, has forecast that Thailand could produce about 10.6 million tonnes of sugar from 103-104 million tonnes of cane in the current crop.

The government has set aside 2.4 million tonnes of sugar for domestic consumption, with the rest for exports.

Thailand's 2014 sugar exports reached 7.3 million tonnes, the highest ever, up from 6.6 million tonnes in 2013. Its top six buyers last year were Indonesia, Japan, China, Malaysia, Cambodia and South Korea.

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