Indonesian sugar shortage risk could lift Thai export demand
Thai raw sugar exporters could gain orders if Indonesia faces shortages in early 2027, but quotas and import permits remain decisive.
- Indonesia's refined sugar industry faces a potential raw material shortage in early 2027, as the Indonesian Refined Sugar Association (AGRI) warns that current supplies could be exhausted by the end of 2026.
- This potential supply gap in Indonesia, which is a major market for Thai sugar, could create stronger export demand for Thai producers.
- Any increase in Thai sugar exports to Indonesia is entirely dependent on the Indonesian government's decisions regarding 2027 import quotas and the timely issuance of permits.
- AGRI is urging the Indonesian government to expedite the approval of 2027 import permits to prevent supply disruptions, and the timing of this decision will determine the export opportunity for Thailand.
Thai raw sugar exporters could see stronger demand from Indonesia in early 2027 if its refining industry runs short of supplies, according to Thailand’s Office of International Trade Promotion in Jakarta. Any increase in shipments, however, will depend on Indonesian government quotas and import permits.
The trade office, part of the Department of International Trade Promotion (DITP), sees a potential opportunity despite Indonesia’s efforts to rely more heavily on domestic sugar production. Refiners still need sufficient raw materials to maintain output while local supplies remain constrained.
Indonesia bought approximately US$715 million of Thai sugar in 2025, accounting for more than 27% of Thailand’s total sugar export value. Cambodia, South Korea and the Philippines were the next-largest markets.
Thailand was the world’s second-largest sugar exporter after Brazil that year, shipping about 5.5 million tonnes worth more than US$2.6 billion.
Refiners warn of a supply gap in early 2027
The Indonesian Refined Sugar Association (AGRI) has warned that supplies of refined crystal sugar (GKR) could fall short of demand from the country’s food, beverage and pharmaceutical industries in early 2027.
Supriadi, AGRI’s chairman, has called for faster decisions on raw crystal sugar (GKM) import quotas and permits for 2027 so that refineries can secure a continuous supply of raw materials.
According to AGRI, the government allocated approximately 3.06 million tonnes of raw sugar imports to the refining industry for 2026. At the end of September, 945,417 tonnes of that allocation remained unused, while refined sugar stocks stood at about 134,072 tonnes.
AGRI estimates that remaining raw sugar supplies could decline sharply or be exhausted during November and December 2026, based on projected production and distribution. Some refineries could consequently face raw material shortages late in the year, potentially disrupting refined sugar supplies in early 2027.
AGRI has asked the government to complete its commodity balance assessment, determine industrial raw sugar requirements and issue 2027 import permits early enough for businesses to arrange purchases in advance.
Raw sugar imports remain possible under separate rules
Raw sugar imports for industrial processing can still proceed under Ministry of Trade Regulation No. 18/2025, as amended by Regulation No. 31/2025, subject to specified conditions and government approval.
Ministry of Trade Regulation No. 47/2025, known as Permendag 47/2025, lists 12 categories of goods prohibited from import, including sugar. It was signed on December 29, 2025, and took effect on January 1, 2026.
The rules provide for imported raw sugar to be processed by refineries into refined sugar for the food and beverage industries. Volumes remain subject to Indonesian government allocations and import permits.
The prohibited-import list therefore does not mean that all Thai raw sugar shipments to Indonesia must stop. Equally, demand from refiners does not automatically trigger larger quotas or new import permits.
Quota timing will determine Thailand’s export opportunity
AGRI estimates that purchasing and transporting raw sugar to Indonesia generally takes one to two months from placing an order to arrival. Delays in setting 2027 quotas or issuing permits could leave refiners struggling to replenish supplies before existing stocks reach critically low levels.
For Thailand, the outlook also carries a downside risk. If Indonesia cuts or slows imports more sharply than expected, Thai export volumes and domestic sugar market conditions could be affected. The impact will depend on annual quota allocations and permit approvals.
Thai exporters should therefore monitor Indonesia’s commodity balance assessment and 2027 import quotas closely, while coordinating with importers, refineries and industrial buyers to establish raw sugar requirements and confirm the conditions for bringing shipments into the country.
Businesses should also prepare adequate supplies and delivery schedules so they can respond if Indonesian buyers accelerate purchases for production in early 2027. Such planning could help Thai exporters protect their existing market share and secure further sales if additional imports are approved, the Thai trade office concluded.
