Thailand, the world's second-largest sugar exporter, is grappling with an array of challenges that have placed its sugar industry in a precarious position. With over 1.6 million hectares dedicated to sugar cane cultivation, Thailand produced an impressive 11 million tonnes of sugar in 2023. However, the nation's status as the third-largest raw sugar exporter is being threatened by a combination of climate crisis impacts, declining global prices, and international trade restrictions.
The sugar industry in Thailand is feeling the strain from a dramatic collapse in global sugar prices. Prices for white sugar have dropped to around US$470 per metric ton, marking the lowest since September 2021. This price slump has been exacerbated by an oversupply from major sugar-producing countries such as Brazil and India. As a result, Thai consumers can currently purchase sugar at a factory gate price of about 20 baht (58 US cents) per kilogram, reflecting the domestic consequences of this global pricing issue.
Adding to these challenges is China's recent ban on imports of Thai sugar syrup. This trade restriction is a significant blow, given that about 70% of Thailand's sugar exports are shipped overseas. The global price of sugar, dictated by the New York exchange, continues to be volatile, contributing to the instability faced by Thai sugar producers.
The climate crisis presents another formidable challenge for Thailand's sugar industry. Unpredictable weather patterns and extreme conditions are affecting crop yields, further complicating efforts to stabilize production levels and maintain competitiveness in the international market.
Despite these adversities, Thailand's sugar industry remains a crucial component of the nation's agricultural economy. Efforts are underway to address these multifaceted issues and support the sustainability of this vital sector. Strategies include exploring new markets, enhancing production efficiency, and investing in climate-resilient agricultural practices.
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