Thailand, renowned as the world's second-largest white sugar exporter and third-largest raw sugar exporter after Brazil, is navigating a tumultuous period. The nation dedicates over 1.6 million hectares to sugar cane cultivation, producing 11 million tonnes of sugar in 2023 alone. However, recent global market fluctuations and domestic challenges are casting shadows over its sugar industry. The price of white sugar has plummeted to US$470 per metric ton, marking its lowest since September 2021, and despite a slight rally, prices are expected to remain sluggish throughout the year.
Approximately 70% of Thailand's sugar production is earmarked for overseas markets, with prices set on the New York exchange. Presently, Thai sugar fetches a factory gate price of about 20 baht (US$0.58) per kilogram. Yet, the recent nosedive in global sugar prices to three-year lows is severely impacting the industry. This decline poses significant challenges for Thailand's sugar exporters who are grappling with reduced profit margins and increased competition.
The situation is further exacerbated by a series of domestic and international hurdles. China, a prominent trade partner, has recently imposed a ban on imports of Thai sugar syrup, further straining the export-driven industry. Domestically, Thailand's battle against air pollution is adding to the list of challenges faced by sugar producers. This environmental fight impacts agricultural practices and requires adjustments that could prove costly for farmers.
Additionally, the climate crisis looms large over Thailand's agricultural sector, including its sugar industry. Shifts in weather patterns and unpredictable climate conditions make it increasingly difficult for farmers to maintain consistent production levels. As a result, the industry is under pressure to adapt rapidly to these changing conditions or risk further losses.
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