Sugar prices to edge up from May as plastic and oil cost pressures grow

Thai Sugar Millers Corporation (TSMC) has outlined its approach to managing domestic sugar prices as production costs continue to rise due to global economic pressures and energy market volatility.

The corporation confirmed that retail sugar prices would remain frozen throughout April in a bid to help ease the cost-of-living burden on the public.

At the same time, the industry is reviewing the retail price structure to bring it more closely into line with changing costs. Any adjustment is expected to take effect from May 2026 onwards, under a framework designed to carefully manage the impact on all sides and maintain a balance between consumers and businesses.

The move is aimed at preserving stability in Thailand’s cane and sugar industry so that it can continue operating smoothly at a time when costs remain volatile.

Dr Somchai Harnhirun, chairman of the TSMC coordination committee, said manufacturing sectors worldwide were facing rising costs, particularly in energy and petrochemicals, with knock-on effects across industries, including Thailand’s sugar sector.

One of the clearest pressures, he said, was packaging costs. Global plastic pellet prices have risen sharply, pushing up the cost of bags and sacks used for sugar packaging by an average of around 40%.

At the same time, persistently high oil prices have driven up transport costs, adding to expenses from deliveries to warehouses through to nationwide distribution to retail outlets. These have become hidden cost increases at every stage of production and distribution.

Sugar producers had previously tried to manage costs as much as possible, including through advance raw material contracts and tighter control of other expenses, he explained.

However, with global supply chains remaining volatile and changing rapidly, many raw material producers and suppliers have gradually raised prices in line with higher costs, leaving the sugar industry unable to avoid the latest round of cost pressures.

“For more than a month, operators in the sugar industry have worked closely with the government while trying to absorb rising costs themselves in order to delay the impact on consumers, especially at a time when living costs remain high,” Somchai said.

“As a result, there has been a joint resolution to continue freezing retail sugar prices throughout April to help reduce the burden on the public during a period when pressures are being felt on many fronts.”

However, with costs still rising steadily across several areas, he said it had become necessary to review the price structure so that it better reflected actual conditions and helped preserve balance across the system, including production, liquidity management and supply chain continuity.

Preparing to adjust retail prices from May onwards is therefore seen as a way to safeguard the long-term stability of the industry, allowing all parties in the system, including consumers, businesses and farmers, to get through this period more securely, he added.

Somchai went on to say that Thailand currently has total sugar production capacity of about 11.8 million tonnes per year, while domestic consumption stands at roughly 2.35 million tonnes annually.

Of that total, about 450,000 tonnes are consumed directly through retail sales to households, while the rest is indirect consumption supplied to industrial users such as the food, beverage and pharmaceutical sectors.

In this latest price structure review, the industry has carefully assessed the impact and decided to raise only the retail price. Prices charged to industrial users will remain unchanged in this round.

He said the approach was intended to prevent knock-on increases in the prices of other consumer goods, thereby helping to maintain broader economic balance.

“This price review is being carried out with responsibility to all parties. It is not aimed solely at solving factory cost issues, but at preserving the continuity of the entire cane and sugar industry,” Somchai said.

“Adjusting prices to reflect actual costs is a way to maintain the stability of the industry, which plays an important role in both the agricultural and manufacturing sectors of the country.”

He said TSMC would continue to closely monitor the global economic situation, energy prices and production costs in order to assess the direction ahead and adjust in line with market mechanisms as appropriately as possible, so as to ensure that consumers, businesses and farmers can all get through this situation with confidence.