Thailand ups sugar price by 4 baht to sweeten domestic market

The Office of the Cane and Sugar Board (OCSB) issued a new factory price of sugar before VAT, to be effective from Saturday (October 28). Under the adjustment, the price of white sugar will rise from 19 baht to 23 baht per kilogram, while refined white sugar will cost 24 baht per kg, up from 20 baht per kg.

These new prices will be used to calculate the buying price of sugarcane for the crop of 2023/2024, which starts in December, the source said.

Without this adjustment, sugarcane farmers would not benefit from the price difference of sugar in domestic and global markets in next year’s harvest, the source added.

The price hike also ensures that factories will continue selling to domestic buyers instead of exporting their products to overseas markets, which offer better prices, it added.

Thailand runs a free market for sugar, allowing manufacturers to sell to anyone who offers the best price, be it a domestic or foreign buyer. This practice, along with the raising of factory prices in Thailand, will benefit both farmers and sugar manufacturers, who contribute part of their earnings to the fund that supports pollution-free sugarcane harvesting.

Boonthin Kotesiri, director at the state-run Thai Cane and Sugar Corporation, said the global price of sugar has been rising and Thai factories should follow the trend.

For instance, he said, the price of white sugar in London for December delivery is listed at US$734.2 (26,519.30 baht) per tonne or about 26-27 baht per kilo. With a price as high as this, factories would likely import all their products overseas.

Thailand produces an average of 10 million tonnes of sugar per year, with an export ratio of 70-75%, leaving only about 2.6 million tonnes for domestic consumption. About half of this goes to domestic food manufacturers and the rest is sold as bagged sugar at supermarkets.