Upgrading sucrose content key to keeping sales shares in region

It should also float the sugar price to prevent a shortage in the domestic market once the Asean Economic Community comes into effect in 2015.
“It’s time to think about these issues. Asean is becoming a single market, but the Thai sugar industry so far hasn’t had any measure to both protect the industry and maintain the markets in which we should be the leader,” Cherdpong Siriwit said yesterday.
Thailand’s 47 sugar millers have joined forces to revolutionise the sector by agreeing to achieve a single pol standard of 99.2 degrees to boost their export market and increase farmers’ incomes.
In order to upgrade the sugar-content standard, millers need to invest in revamping their operations. Some may be ready to do so immediately, while others may take time to adapt.
As a result, about 70 per cent of millers will be ready to export sugar with the new pol standard in the next seasonal crop (2012-2013), he said.
The TSMC chief added that the new single standard would enable Thai raw sugar to better compete in the Asian market. It will also not only enable only farmers to generate higher incomes, but also allow millers to store their sugar under the same warehouses.
TSMC executive chairman Vibul Panitvong said that if millers did not upgrade the pol standard to 99.2 degrees, they would lose markets that require such a high standard of sugar content to rivals outside of Asean, such as Brazil.
Indonesia and Malaysia, for instance, have now have shifted |to importing sugar from Brazil instead of Thailand because of the pol standard.
“Southeast Asian countries import around 8 million tonnes of sugar per year, with Indonesia alone importing 3 million tonnes. Thailand this year is likely to break the record for sugar production of over 100 million tonnes. It’s a good milestone, but we can’t stand still and lose the Asean markets to our rivals,” he said.
Domestic sugar production as of March 6, halfway through this season’s crop, stood at 73 million tonnes. TSMC is therefore confident that production this year will surpass 100 million tonnes, added Vibul.
He said that from last year’s crop, Thailand exported 6.71 million tonnes of sugar, with 86 per cent of the production sold to the Asian market. Forty-two per cent of the Kingdom’s Asian exports went to Asean.
Regional production cannot absorb all Southeast Asian consumption as some countries have to import from outside Asean because of the sucrose-content requirement. Asean last year imported 5.7 million tonnes of sugar.
Vibul said that floating the retail price of sugar was another issue that the government should consider seriously, otherwise, the domestic market could face a shortage once the Asean Economic Community is implemented.