Insight Focus
Thailand’s 2024/25 cane crush should reach 110 million tonnes. A record cane price, normalised fertiliser prices, successful area expansion and well-germinated cane should all contribute. The final result will be dictated by rainfall throughout the rest of the year.
We are positive on the sugarcane area expansion given from what we observed from our trip in the Upper Northeast and Upper Central area.
Cane in Khon Kaen Province
There is a significant growth of new planting area given the farmers have made a switch from rice in the low land (West of Upper Northeast) and cassava in the high land (East of the Upper Northeast) to sugarcane. This was largely down to a record cane price of THB 1,420/tonne.
The cane in the low land clay soil area will provide more ratoons than the sandy soil area and a higher agricultural yield which should help to increase the amount of cane crush next year. The clay soil should produce three to five ratoons compared to one to two ratoons in the sandy soil.
Cane in Lopburi
There is a similar story in the Upper Central area while Upper Northeast has more access to irrigation.
Damaged cane (late April) vs recovered cane (mid-May)
However, positively, the first rain has now finally arrived in mid-May and this rain brings a much-needed boost to a lot of the cane area and an opportunity for farmers start applying fertiliser.
We still need to monitor the amount rainfall throughout the rest of the year as Thailand expect a La Nina phenomenon to arrive in the second half of 2024.
Damaged cane (late April) vs recovered cane (mid-May)
Despite there having been lots of newly planted cane when we visited the cane fields earlier in May, at the time we were getting very concerned about the dry weather, with January-April rainfall being one of the lowest for five years.
It was clear that some of the cane was struggling, with the rain shortage causing the sugarcane to be stunted, with a thin brown leaf.
Despite the lower rainfall earlier in the year, we are very positive that there could be a rebound for the 2024/25 crop. It has been a very long time since we have seen so much new plant cane in the Northeast and especially so in rice growing areas, where the access to irrigation and better soil will support agricultural yields.
Farmers have started to apply fertiliser
Given the positives, we believe that Thailand will produce 110 million tonnes of cane next season, putting sugar production back above 12 million tonnes — the highest in five years.
