Thai drought could drive up global sugar prices

If that happens, the global price of sugar could increase next year,  as Thailand is one 

of the world’s three largest suppliers of the commodity.

Kitti Choonhawong, president of the organisation, said that if drought does not seriously affect cane production, output should reach 100 million tonnes during the 2012-13 harvest season. However, as 50 provinces are currently experiencing drought, output could be down by 20 million to 30 million tonnes, as sugar cane favours high humidity and rainfall, he explained.

He said sugar-production areas in the Central region should be closely monitored in particular, since farmers will start to plant cane in July and August. If rainfall is much lower than normal, 2012-13 sugar-cane production could drop to its lowest record in three years.

Output for 2011-12 is expected to come in at about 98 million tonnes when the harvest season concludes at the end of this month, as it is 97.7 million tonnes currently. 

Meanwhile, to promote Thailand as the world’s centre for sugar production, Sugar Asia 2012 will be held in Thailand for the first time. The event has normally been held in India. The move is part of the organiser’s strategy to promote strong growth of the sugar industry in Asia.

Kitti said many countries in Asia, particularly Asean nations, had highly developed sugar-processing industries, and holding Sugar Asia 2012 in Thailand would draw many enterprises to observe market trends, innovation and technology in this industry.

The fourth edition of the internationally acclaimed exhibition on sugar and allied industries will be held on May 16-17 at Queen Sirikit National Convention Centre in Bangkok. 

VK Bansal, director of Nexgen Exhibitions, the organiser of the event, said the event was expected to attract a number of companies from India, Europe, Australia, Southeast Asia and other areas in the farming, sugar, co-generation, and distillery and ethanol industries. 

Sugar Asia is the only international exhibition of its kind in the economically important Asia region. He said Asia had become the most dominant force in the global sugar industry. Most of the top 10 producing countries, namely India, China, Thailand, Pakistan, the Philippines and Indonesia, are in Asia. There is consensus among analysts that this region will drive the industry through consumption and import demand. 

Thailand’s sugar industry plays a central role in the country’s economic and social development, generating annual revenue of more than Bt50 billion. Being one of the world’s leading producers and net exporter of sugar, Thailand has plenty to offer participants in Sugar Asia in terms of trips to farms, mill, ethanol distilleries and factories, Bansal said.