Thai Sugar Exports Set for 125% Growth in 2023

Sugar

Thailand

Market & Price Trends

Published Jan 11, 2023

It is becoming increasingly likely that the sweetness one tastes in a cup of tea around the world is Thai sugar, as the South Asian country looks to continue its steady export growth in 2023. Shipments of sugar from Thailand could reach USD 3.7 billion (11 million tons) this year, bringing the level of export growth up significantly to 125% over the past two years. Sugar consumption is on the rise globally, estimated at 179 million tons in 2023, 3.5 million tons more than last year due to increasing demand in Asian markets. This trend bodes well for Thai exporters, whose major trading partners are Asian countries such as Vietnam, Indonesia, Malaysia, and Bangladesh. The capacity for growth remains high in Thailand, as climatic factors in the large sugarcane-growing regions facilitate high productivity.

It is becoming increasingly likely that the sweetness one tastes in a cup of tea around the world is Thai sugar, as the South Asian country looks to continue its steady export growth in 2023. As it capitalises on rising global demand for and consumption of Thai Sugar. Thai sugar exports rose by 120% in 2022, with a further increase of 5% expected in 2023, solidifying the country's position as the second-largest sugar exporter in the world. Shipments of sugar from Thailand could reach USD 3.7 billion (11 million tons) this year, bringing the level of export growth up significantly to 125% over the past two years.

Source: USDA

Sugar consumption is on the rise globally, estimated at 179 million tons in 2023, 3.5 million tons more than last year due to increasing demand in Asian markets. This trend bodes well for Thai exporters, whose major trading partners are Asian countries such as Vietnam, Indonesia, Malaysia, and Bangladesh. In Vietnam, an average consumer takes in 50 grams of sugar daily, 50% higher than in most countries. This elevated consumption along with a meagre domestic crop that only services 40% of the country's demand, creates a significant opportunity for Thailand, whose sugar exports to Vietnam rose to over USD 149 million last year, a growth of 35% over the past five years. Thai sugar exports have also benefited from the recent removal of several tariffs in Vietnam, as the nation entered additional FTAs, notably the ASEAN Trade in Goods Agreement (ATIGA), which effectively removed Vietnam's import tariffs for sugar from 2020.

A similar scenario is present in Indonesia, where sugar consumption is up to 7.3 million mt per year, growing by 20% over the past decade, while local production remains low. Thai sugar exporters capitalised on this situation by shipping over USD 400 million to Indonesia last year. Additionally, sugar consumption in Indonesia could rise to 7.8 million mt per year by 2028, and Tridge forecasts that Thai exports to Indonesia could increase by 5-10% between 2023 and 2028.

Imports of Thai sugar will remain high in Bangladesh this year due to the country's heavy reliance on imported sugar, as domestic production only meets 5% of the annual demand. Following the recent restriction on sugar shipments placed by India, other trade partners such as China, Tanzania, and Kenya will also seek alternative sources of sugar, a situation that could further benefit Thailand.

The capacity for growth remains high in Thailand, as climatic factors in the large sugarcane-growing regions facilitate high productivity. As a result, the amount of sugar production and stock in Thailand is sufficient to meet the increasing global demand.