The cabinet on Tuesday approved a final sugar cane price for the 2022/2023 season of 1,197 baht a tonne, 117 baht higher than the initial price set at 1,080 baht a tonne.
Additionally, the cabinet approved the initial sugar cane price for the 2023/2024 season, set at 1,420 baht per tonne.
According to Chai Wacharonke, a government spokesman, the final prices were slated for sugar cane with a commercial cane sugar (CCS) sweetness level of 10.
CCS measures the sweetness of cane, with a higher sugar content resulting in larger sugar output and a higher CCS.
The cabinet also imposed a rate of increase/decrease of the sugar cane price equivalent to 71.85 baht per 1 CCS unit.
The return for sugar production and distribution was set at 513.23 baht per tonne of sugar cane crushed.
According to Mr Chai, because the final price endorsed by the cabinet is higher than the initial sugar cane prices by 117 a tonne, sugar mills would have to pay the difference to the planters.
In a related development, Kenika Ounjit, a deputy government spokeswoman, said the cabinet on Tuesday also approved a document to settle the dispute regarding sugar under the World Trade Organization (WTO) between Thailand and Brazil, as proposed by the Commerce Ministry.
According to Ms Kenika, over the years the Thai government has engaged in negotiations with Brazil, while making significant improvements to the country's sugar and cane structure, along with continuous adjustments to relevant laws and regulations, particularly a reduction of subsidy measures. This led Brazil to recognise Thailand's efforts, resulting in a settlement reached in December 2023.
Thailand's Commerce Ministry presented a settlement document, acknowledged mutually between the Thai and Brazilian governments on the issue of sugar subsidies. The signing will occur during the WTO meeting set to take place during Feb 27-29 this year.
Previously, Brazil initiated the process to address the dispute over Thailand's sugar subsidies on April 4, 2016, stating that Thailand's support for its sugar and sugar cane industry may not comply with WTO regulations, impacting Brazil, the world's leading sugar exporter.
Subsequently, both countries engaged in negotiations from 2016 to 2023. Thailand undertook structural adjustments to its sugar cane and sugar industry, such as abolishing the quota system in January 2018 without specifying export quotas and aligning with market mechanisms.
Furthermore, Thailand annulled the domestic sugar price setting by amending Section 17 of the Sugar and Cane Act of 1984 and adjusted the support funds previously provided by the state to sugar mills when the final sugar cane price fell below the initial sugar cane price. As a result, there is no longer government funding support.