Sugar production in Thailand, a top exporter of the sweetener, is heading for a three-year high after an end to two years of drought-like weather conditions improved crop prospects.
Output may reach 10 million tonnes by the end of the current crushing season on March 31, according to Thai Sugar Millers Corp. The mills produced 9.6 million tonnes from crushing 87.75 million tonnes of cane since the start of the harvest season on Dec 7, the group said on Tuesday.
The sugar cane harvest may total 90 million tonnes, up 35% from 66.7 million tonnes in the previous season, the group estimated. The Southeast Asian nation may end up exporting about 70% of the sugar output, with the rest being consumed locally, according to Sirivuthi Siamphakdee, an executive at the Millers Corp.
While the group expects cane harvest and sugar production to further expand in the 2022-23 season, Russia’s war in Ukraine has muddied the outlook, Mr Sirivuthi said. The group previously forecast 100 million tonnes of cane and as much as 13 million tonnes of sugar in the coming season.
“If we look at higher rainfall alone, our output should be higher. But, it’s not that simple,” Mr Sirivuthi said. “Our costs, especially oil, fertilizer and freight rate, have jumped. It’s too early to predict now with so many uncertainties.”
Thai sugar farmers and producers are concerned about the rising input costs, he said, adding even though sugar prices have risen after the war, there was no guarantee the costs will not exceed selling prices later.
Sugar prices in New York have rallied almost 25% in the past year, but costs of fertilizer, pesticides and diesel have soared since the Russian war in Ukraine, fuelling production costs for farmers.