Opinion

Thailand’s Sugar Exports to Recover After 2 Years

Sugar
Thailand
Market & Price Trends
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With a rebound in sugarcane production after nearly 2 years, it is expected that Thailand will double its volume of exports in the upcoming MY 2021–22. Higher volumes, coupled with a strong demand for Thai sugar are expected, as it is likely that Brazil will produce more ethanol than sugar due to an upward trend in oil prices.Sugar exports totaled 2.6 million mt in the first four months of MY 2021-22, up 137% YoY over the same period the previous year. Traders are expecting that the price of raw sugar will be higher in the current MY due to which there will be an increase in raw sugar exports as sugar refinery businesses in importing countries will import more raw sugar to make higher profits in their countries.

The Thai sugar market is expected to rebound in their production of sugarcane and centrifugal sugar production after two consecutive years of drought. It is likely that the country will record an increase in its sugar exports but will continue to face logistical challenges in securing freight to export its surplus supply to buyers. The USDA has forecasted that Thailand’s sugar exports will more than double in the marketing year (MY) 2021-22 (December 2021-November 2022) and further increase by 10% in MY 2022-23. The high exports will be driven by large exportable supplies of sugar. Furthermore, Thai traders are expecting that there will be a strong demand for Thai sugar as Brazil will likely produce more ethanol than sugar due to an upward trend in oil prices.

Sugar exports during the first four months of MY 2021-22 totaled 2.6 million mt, which is a YoY increase of 137% from the same period last year. Exports of raw sugar increased significantly to 1.7 million metric tons, a YoY increase of 76%, while the exports of white and refined sugar recorded a YoY increase of 39% over the previous year. It is expected that the high export volumes will lower sugar inventories in Thailand. Consequently, it is expected that the sugar mills who were already struggling to maintain their stocks amid lower production will continue to face a shortage of raw materials despite a recovery in sugarcane production during MY 2021-22 and MY 2022-23.

According to the ​​Office of Cane and Sugar Board, Ministry of Industry, in 2021, Thailand exported 3.8 million mt of sugar. Of the total sugar exported, 55% was white and refined sugar and 44% was raw sugar. The exports were made to large markets like Vietnam, the United States, South Korea, Japan, and Singapore. According to the traders, it is likely that the exports of raw sugar will increase significantly as the price difference between MY 2020–21 and MY 2021–22 has increased dramatically. This year's price of raw sugar is hovering around USD 100 per mt, which is significantly higher than the previous year's price of USD 60-70 mt. The higher prices have encouraged sugar refinery businesses in importing countries to import more raw sugar and make higher profits. The outlook for Thailand’s sugar export s remains positive this year, provided the sugarcane production and harvest remain on a positive track.


Source: Office of the Cane and Sugar Board, Ministry of Industry

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