The Central Committee on the Prices of Goods and Services, chaired by Commerce Minister Phumtham Wechayachai, agreed on Monday to regulate sugar prices to alleviate the impact on consumers.
The committee also agreed to issue measures to cap the ex-factory prices for granulated sugar at 19 baht per kilogramme and refined sugar prices at 20 baht per kg, while tightening sugar exports.
Exporters shipping out more than one tonne of sugar must seek prior approval from the ministry.
Mr Phumtham said these measures will be submitted to the cabinet meeting for approval on Tuesday.
The committee’s decision came after the Cane and Sugar Board announced on Friday it was raising ex-factory sugar prices by 4 baht per kg, effective from Oct 28.
The board cited higher production costs from manufacturers as cane prices rose due to the drought.
The 4-baht increase is expected to be split into a 2-baht hike for higher production costs and a 2-baht increase for the Cane and Sugar Fund, pushing retail prices higher.
The current ex-factory price for granulated sugar is 19 baht per kg, and refined sugar prices are quoted at 20 baht per kg.
The retail price of granulated sugar is 24 baht per kg, while the price of refined sugar is quoted at 25 baht per kg.
As a result of the Cane and Sugar Board's decision, the ex-factory prices for granulated sugar increase to 23 baht per kg and refined white sugar rise to 24 baht per kg. The retail prices of granulated sugar and refined sugar should follow suit at 28 baht and 29 baht per kg, respectively.
The price hike is expected to have an impact on other products that use sugar cane as an ingredient, particularly beverages including soft drinks, fruit juices, energy drinks and dairy products, as well as various confectionery and baked goods.
This would increase the cost of living at a time when the government is trying to reduce living costs and people's expenses.
Earlier, the Thailand Sugarcane Planters Association reported the cane harvest for the 2023/24 season may fall to 80 million tonnes, a decrease of about 10% from the previous season, which was estimated at 94 million tonnes, based on water shortages in key production areas.
Sugar exports are expected to decrease to 6 million tonnes in 2024, from 8 million tonnes this year.