BANGKOK Oct 5 Thailand's cane sugar output for
2016/2017 crop year is expected to fall 3.2 percent because of a
widespread drought which will pull refined sugar output lower as
well, a government agency said on Wednesday.
Thailand, the world's second-largest sugar exporter,
experienced its worst drought in more than two decades earlier
this year because of the El Nino weather pattern, causing crops
to die. The El Nino weather phenomenon brings scorching heat
across Southeast Asia and impacts crop yields.
Thailand expects to reap 91 million tonnes of cane in
2016/17, down from 94.05 million tonnes in 2015/16, said Somsak
Jantararoungtong, secretary-general of the Office of the Cane
and Sugar Board.
"That should translate to around 9.3 to 9.4 million tonnes
of refined sugar next year, compared to this year's 9.6 to 9.7
million tonnes," said Somsak.
Dry weather conditions can make cane less sweet, meaning
mills need more to produce the same amount of sugar.
Thailand's cane output has been dropping since the country
harvested 105.96 million tonnes in 2014/15.
Despite the slide in output, the Thai sugar industry said it
remained confident the industry can weather the impact.
"The lower output won't affect trade," said Sirivuthi
Siamphakdee, chairman of the public relations team of the Thai
Sugar Millers Corporation Limited, which represents three sugar
In March, Thailand slashed its forecast for 2016 sugar
exports to 7.1 million tonnes from an earlier estimate of 11
Stockpiles in India, the world's biggest exporter of the
sweetener, will fall to 23.3 million tonnes next year, the
lowest in over a decade, as consumption outstrips supply, the
Indian Sugar Mills Association said in July.
A drop in output levels from Thailand and India has
contributed to forecasts for a widening global supply deficit
this year, fuelling a rally in international prices to a
Somsak said more relaxed regulations as part of the Thai
government's drive to support the sugar industry has prompted
sugar millers to request licenses for new mills and mill
"The sugar price outlook in the next five years encourages
farmers to grow cane," he said. "So far this year the board has
issued approvals for 22 new plants and 17 mill expansions."
Millers have five years to complete construction of their
mills before their licenses expire, he added.
There are currently 54 sugar mills in Thailand.
(Writing by Patpicha Tanakasempipat; Editing by Amy Sawitta
Lefevre and Christian Schmollinger)