Thailand Sugar Production Set to Rebound as Exports Surge

Thailand's sugar production is expected to rebound in the 2024/25 marketing year, driven by a recovery in sugarcane production and increased sucrose yields, according to a recent report by the USDA's Foreign Agricultural Service (FAS).

FAS forecasts sugarcane production to reach around 96 million metric tons (MMT) in MY 2024/25, a 13% increase from the previous year. This recovery is attributed to favorable weather conditions and attractive farm-gate prices for sugarcane, which have incentivized farmers to continue planting.

"Farmers continue to grow sugarcane due to attractive farm-gate prices," the FAS report states. "The Office of Agricultural Economics reported that farm-gate price of sugarcane in the first quarter of 2024 was 1,438 baht/MT ($39/MT), a 28 percent increase from the same period last year."

Sugar production is projected to increase to 10.2 MMT in MY 2024/25, up 16% from the estimated 8.8 MMT in MY 2023/24. This increase is driven by the expected recovery in sugarcane production and an anticipated rise in sucrose yields.

"Post forecasts MY 2024/25 sugar production to increase to 10.2 MMT, up 16 percent from MY 2023/24, mainly due to the recovery in sugarcane production and increased sucrose yield," the report explains.

Thailand's sugar exports are expected to surge in MY 2023/24 and remain strong in MY 2024/25 as the country fills the gap left by India's ongoing sugar export restrictions. India, the world's second-largest sugar exporter, has limited exports due to reduced sugarcane production caused by drought.

"Foreign buyers will likely source Thai sugar as they are concerned about limited exportable supplies of Indian sugar after the government extended its sugar export restriction beyond October 2023," the FAS report notes.

While sugar consumption growth in Thailand is expected to moderate due to a slower economic recovery and government measures to curb sugar intake, the overall outlook for the Thai sugar industry remains positive. Increased production and strong export demand are expected to support the sector's growth in the coming years.