Sugar producers in Indonesia, the Philippines and Thailand yesterday agreed to establish the Asean Sugar Alliance (ASA) to strengthen the sector ahead of the launch of the Asean Economic Community in 2015.
The ASA will initially serve as a venue to exchange views and cooperate on research and technology, logistics and business development.
Cherdpong Siriwit, who will serve as ASA chairman, said he expects Thailand to increase its sugar exports to Asean as the alliance matures.
Other Asean countries are expected to join the ASA in the near future, he said, adding that the partnership will be a mechanism to assist the government sector in eliminating obstacles hindering the development of the sugar industry, such as protectionist measures used by other countries against imports.
Mr Cherdpong, who is also chairman of the Thai Sugar Millers Co, said the ASA will meet annually.
With a population of 600 million, Asean produces about 17 million tonnes of sugar and consumes 14 million tonnes per year. On average, each person in the region consumes about 23 kilogrammes of sugar per year, according to the International Sugar Organisation.
Thailand, Indonesia and the Philippines produce about 15 million tonnes of sugar per year combined, with 10 million tonnes from Thailand, 2.5 million from Indonesia and 2.5 million from the Philippines.
While the Philippines produces enough for its domestic consumption, Mr Cherdpong said Indonesia imports 1.6 million tonnes of sugar from Thailand each year. He said opportunities exist for export growth.
"The ASA therefore provides us with an opportunity to invest in member countries, as they are our partners [in the joint venture]," he said.
Rapidly growing countries such as Myanmar are also expected to see rising sugar consumption. Mr Cherdpong said the ASA will help facilitate sugar sales across the region.
He added that Thai sugar mills are interested in investing in Myanmar, given its relatively large population of 60 million and its low number of sugar mills.
"Thai companies have begun to seek opportunities to invest in neighbouring countries such as Laos, Cambodia and Myanmar, as we definitely have a lot of potential to conduct so," said Mr Cherdpong.
Ferial Lubis, deputy director for processing and agricultural marketing for Indonesia's Ministry of Agriculture, said Indonesia wants to cooperate with Thailand on increasing exports and technology transfer, and with Filipino companies on increasing worker productivity.