Sugar mills sound alarm over drought

May 13, 2020
Bangkok Post |

Thailand's sugar mills are warning that another drought could significantly cut into output for the 2020-21 crop year.

Siriwut Siempakdi, president of the Thai Sugar Millers Corporation (TSMC) public relations working group, said the industry must brace for the next drought.

For the last crop year (2019-20), TSMC reported sugar-cane output of 74.9 million tonnes, resulting in 8.27 million tonnes of sugar.

"Last crop year, the drought crisis affected the sugar-cane industry globally and it increased global sugar prices up to 15 US cents per pound, but this year Brazil plans to increase sugar exports," Mr Siriwut said.

TSMC has closely monitored Brazil to see if the country will cause sugar prices to decline by redirecting some of its production towards biofuels.

Global sugar prices have already decreased to 11.09 cents per pound from 15 cents per pound earlier this year.

The spread of the coronavirus cut into demand for oil as well, causing Brazil to delay transitioning some of its sugar production to biofuels.

"These factors will affect the sugar-cane and sugar mill industry in Thailand, and TSMC expects it will be another hard year for the industry," Mr Siriwut said.

If the sugar-cane production area in northeastern Thailand sees lower-than-normal rainfall during the wet season, the 2020-21 crop could experience record lows in output.

Thailand is the world's fourth-largest sugar producer and second-largest exporter, after Brazil.

Thailand has a total 57 sugar mills with a capacity of 984,000 tonnes per day, supplied by 11.4 million rai of sugar-cane plantations across 47 provinces.

Mr Siriwut said sugar mills in Thailand plan to help sugar-cane farmers deal with future droughts by securing new sources of water for reservoirs.