Proposed B10bn sugar aid rebuffed

Proposed B10bn sugar aid rebuffed

A proposal by the Industry Ministry for government financial aid worth 10.2 billion baht to help sugar cane farmers in the 2019/2020 season has been rejected.

According to a source at the Government House who requested anonymity, the cabinet on Tuesday told the ministry to revise the proposals as sugar cane prices are rising.

The ministry proposed 10 billion baht be allocated for cane farmers to buy production equipment in the 2019/2020 season, with the rest to be slated for management costs.

The ministry reported sugar cane farmers have been suffering from higher production costs and a widespread drought, causing sugar cane productivity to fall to only 6-8 tonnes per rai from 9.61 tonnes.

The ministry reported farmers’ production costs stand at 1,100 baht per tonne, while the initial sugar cane price is set at only 750 per tonne in the 2019/2020 season, down from 820 baht in 2018/2019, 880 baht in 2017/2018 and 1,050 baht in the 2016/2017 crop year.

Sugar cane production is estimated at 75 million tonnes in 2019/2020 season, down sharply from 131 million tonnes in the 2018/2019 crop.

Sugar production is also projected to fall to 8.5 million tonnes from 14.5 million the previous season, with sugar exports expected to tumble to 5-6 million tonnes from 11-12 million in previous years.

The cabinet said sugar prices are rising as major producers such as the Philippines, India, Australia and the US are expected to see lower production because of droughts.

The sugar price is now quoted at 15 cents per pound, up from 11-12 cents per pound late last year.

The price is likely to increase to 17-18 cents per pound by the middle of this year, according to the source.

Thailand is the world’s fourth largest sugar producer and second largest exporter, trailing only Brazil.

The country has 57 sugar mill factories with a capacity of 983,587 tonnes a day and sugar cane plantations in 47 provinces spanning 11.4 million rai.

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