Global sugar prices are expected to stand at US$0.22-23 per pound in 2024, only slightly lower than a range of 25-26 cents per pound in the first half of this year, which was the highest rate recorded in 12 years, according to Thai sugar producer Khon Kaen Sugar Industry Plc (KSL).
The high prices will benefit Thai sugar exporters, but they may fluctuate if Brazil, the world's largest sugar exporter, continues to produce more sugar rathern than processing sugar cane for the production of ethanol, said Chalush Chinthammit, president of KSL.
Other factors such as flooding, logistics costs and geopolitical conflict could also affect the prices.
Thailand was the world's second largest sugar exporter in 2023-24, followed by India, according to the US Department of Agriculture.
"Brazil has increased sugar output by more than 10% since April to take advantage of high sugar prices in the world market," said Mr Chalush.
India is not likely to export more sugar as it wants to keep producing ethanol to serve its fast-growing industries, while China is expected to import more sugar, following an increase in domestic sugar consumption, he said.
Global sugar prices earlier increased by 30% after sugar cane output decreased in many countries as a result of drought.
Thailand was also affected by drought, resulting in a decrease in sugar cane harvests by 10-15%, or 5 million tonnes, in the 2023-24 crop year.
According to the Office of the Cane and Sugar Board, total sugar cane output this crop year was 82.1 million tonnes. The amount of sugar from mills tallied 8.7 million tonnes, while a total of 3.5 million tonnes of molasses was produced.
KSL believes drought will be less severe in the latest crop year (2024-25), leading to more sugar cane harvests.
"We expect sugar cane output to rise by 10% year-on-year because of more rainfall brought by La Niña. This will be good for the agricultural sector," said Mr Chalush.
La Niña often follows El Niño, which hit Thailand between 2023 and earlier this year. The former brings heavy rainfall, floods and cold weather.
KSL expects sugar cane output to reach 90-100 million tonnes in the 2024-25 crop year, leading to the amount of sugar rising to 9-10 million tonnes.
The company, Thailand's third largest sugar producer, is building its fifth sugar factory, with production capacity of 20,000 tonnes daily in Sa Kaeo. It is set to operate from December this year.
