Sugar cane aid heads to cabinet

Sugar cane aid heads to cabinet

A worker loads harvested sugar cane onto a truck at a mill in Suphan Buri province. The drought has affected Thailand's sugar cane farmers. Jiraporn Kuhakan
A worker loads harvested sugar cane onto a truck at a mill in Suphan Buri province. The drought has affected Thailand's sugar cane farmers. Jiraporn Kuhakan

The Industry Ministry is preparing to ask the cabinet next Tuesday to approve advance payment worth 10.2 billion baht to support sugar cane cultivation, which has been hampered by the pandemic and droughts.

The ministry expects the financial aid, meant to help farmers deal with production costs, will reach more than 200,000 growers in the 2019/2020 crop year.

"If the cabinet approves the advance payment, the ministry will ask the Bank for Agriculture and Agricultural Cooperatives to pay sugar cane farmers," said Ekapat Wangsuwan, secretary-general of the ministry's Office of Cane and Sugar Board (OCSB).

The Finance Ministry earlier agreed with the Industry Ministry to push ahead with the 10.2-billion-baht package, he said.

The largest chunk of the payment, 6.5 billion baht, will be paid to farmers at 85 baht a tonne for crops supplied to sugar mills. Each farmer will be given a maximum quota of 5,000 tonnes.

Another 3.5 billion baht will go to farmers who help the government curb PM2.5 dust by sending only fresh cane to millers. They will be paid up to 92 baht per tonne.

The rest will be allocated to management costs.

The plan to grant advance payments to farmers was originally scheduled in April, but has been delayed for two months, said Kobchai Sungsitthisawad, the industry permanent secretary.

The ministry expects the financial package will help farmers increase their liquidity as they have struggled with low prices for initial sugar cane with a commercial cane sugar sweetness level of 10, priced at 750 baht a tonne. The ministry reports the price during the 2018/2019 crop year was 820 baht.

For the 2019/2020 crop year, the OCSB said Thai sugar cane output will be 74.9 million tonnes, producing 8.27 million tonnes of sugar.

Drought has affected the sugar cane industry globally. Global sugar prices hit a new low as Brazil switched its production from biofuel to sugar, though low oil demand during the pandemic caused Brazil to delay the move.

Thailand is the world's fourth largest sugar producer and the second largest exporter following Brazil.

Thailand has 57 sugar mills with a total capacity of 983,587 tonnes per day. The country has sugar cane plantations in 47 provinces, covering 11.4 million rai.

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