Sugar factories under the Thai Sugar Millers Corporation (TSMC) will maintain their guarantee price to buy sugarcane at 1,000 baht per tonne in a bid to encourage farmers to cut fresh sugarcane for sales.
The rate, used in the 2021-22 crop year, will stay the same in the next 2022-23 crop year as TSMC supports the government's attempt to discourage sugarcane growers from burning during the harvesting process.
The burning method is less time consuming and makes harvesting easier, but it is blamed for polluting the air with PM2.5 ultra-fine dust.
Siriwut Siempakdi, chairman and vice-chairman of TSMC's executive board, said the pricing will serve as an incentive to encourage farmers to adopt the more environmentally friendly method.
TSMC will apply the price to sugarcane with a commercial cane sugar sweetness level of 10. The price would go up if global market prices increase, it said.
The group expects the price guarantee will also encourage farmers to grow more sugarcane in Thailand.
Sugarcane output is expected to fall significantly in the 2021-22 crop year due to drought and a shift to growing other crops among farmers.
"We expect sugarcane output in the 2021-22 crop year may eventually reach 100 million tonnes," said Mr Siriwut.
The projection is more than the target TSMC made earlier this year when it expected the output to be around 90 million tonnes in the 2021-22 crop year.
The sugarcane output stood at 134.9 million tonnes in the 2017-18 crop year and continued to drop to 74.8 million tonnes in the 2019-20 crop year and 66.6 million tonnes the 2020-21 crop year.
TSMC said the ongoing pandemic also affected sugar production because it is among the labour intensive industries. Workers in some factories were found to be infected with Covid-19.
So far 800,000 workers in the sugar industry, around 50% of the total employed, have been vaccinated, up from 30-40% in August.