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Supply Chain

Thailand Raises Sugar Cane Forecast as Rice Farmers Switch Crops

By Steve Wynne-Jones
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Thailand Raises Sugar Cane Forecast as Rice Farmers Switch Crops

Sugar cane output in Thailand, the world’s second-biggest exporter of the sweetener, will be higher than the government previously estimated after rice farmers switched crops.

Output for the 2014-15 crop may exceed 104 million metric tons, beating an earlier forecast of 102.8 million, Pichai Tangchanachaianan, secretary general of the government’s Office of Cane and Sugar Board, said by phone on Thursday. Sugar output may be little changed because of lower yields after drought, he said.

Raw sugar futures have dropped 11 per cent this year. Global production is set to exceed demand for a fifth year, leaving the biggest stockpiles on record, according to the International Sugar Organization. Rice prices traded in Chicago have dropped 14 per cent over the same period.

“An increasing numbers of small rice farmers in the north-eastern region have shifted to grow cane for better returns,” Pichai said. “We could see production of more than 104 million tons this year and probably again next season as income from cane is more attractive than other crops.’’

During the first 130 days of the 2014-15 season started in Thailand on 1 December, the cane harvest was 103.86 million tons, with sugar production of 11.04 million tons, government figures show. In the same period a year earlier, cane output was 101 million tons with sugar production of 11 million tons.

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For all of 2013-14, cane output was an all-time high of 103.67 million tons with record sugar production of 11.29 million tons.

Bloomberg News, edited by ESM

 

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