Sugar cane farmers are requesting an urgent meeting with Commerce Minister Phumtham Wechayachai following the government's decision to regulate rising sugar prices, a move that may cause farmers to stage a fierce protest.
Last Friday, the Cane and Sugar Board announced it was raising ex-factory sugar prices by 4 baht per kilogramme, effective from Oct 28, based on higher production costs as cane prices increased following a drought.
The farmers want Mr Phumtham to clarify the reasons behind the sugar price control and who will benefit from the measure.
"We want to know whether the Commerce Ministry is authorised to control sugar prices in the market. We suspect the benefits will mainly go to businesses using sugar as a raw material after ex-factory sugar prices are controlled," said Narathip Anantasuk, chief of the Thailand Sugarcane Planters Federation.
Thailand decided to have sugar prices determined by the market in 2018 after Brazil, one of the largest sugar producers and exporters, filed a complaint with the World Trade Organization (WTO) accusing the Thai government of unfairly subsidising cane farming and sugar manufacturing.
Farmers complied with global market sugar prices, which were then low, although farming costs were high, driven by expensive fertiliser.
Now with world prices up to around 27-28 baht a kg, the Thai government is trying to keep domestic sugar prices low, which is unfair to farmers, said Mr Narathip.
"It seems the government is interfering with the market mechanism," he said. "We are telling sugar cane farmers countrywide to prepare to counter the government's measure."
Farmers may stage rallies in front of sugar factories to block the transport of sugar from factory compounds, said Mr Narathip.
Industry Minister Pimphattra Wichaikul said she shares the farmers' feelings, especially those who struggle to deal with high farming costs.
She said she also understands the Commerce Ministry's need to regulate prices of necessary products for the public.
Ms Pimphattra said the Industry Ministry will seek ways to alleviate the troubles of the farmers.
Rudklao Suwankiri, a deputy government spokesperson, said the cabinet agreed on Tuesday to have the Industry Ministry consider paying compensation to farmers.
The Federation of Thai Industries said earlier it expects lower rainfall to reduce sugar cane output in the new crop year of 2023-24 to 80 million tonnes, down from the 100 million -105 million tonnes projected earlier.
The smaller yield not only affects farmers' earnings, but also sugar production in the country.