Note: 1 Rai is equal to 0.16 Hectares
- Many of Thailand’s cane farmers will receive at least 1,000 THB/mt next season; the highest provisional cane price on record.
- This highlights the mills’ aim to support Thailand’s cane industry following two consecutively poor seasons.
- With this, Thailand’s cane crop should rebound in 2021/22.
Cane Returns Improve Yet Again
- Thailand’s sugar mills are keen to revive the country’s cane volumes following consecutive seasons of drought and poor production.
- With this, a large number are guaranteeing a price of 1,000 THB/mt for fresh cane (with a Commercial Cane Sucrose Rating of 10) in 2021/22.
- Some mills have been offering this price this season, due to cane being in short supply, but next season it’s guaranteed to many.
- If the final price were to fall short of the guaranteed price in 2021/22, the mill will pay the difference directly to the farmer.
- It gets better, as farmers could actually earn up to 1,700 THB/mt, as they’ll get paid more if sucrose yields are high and they deliver more fresh (as opposed to burnt) cane.
- Along with these high prices, some farmers have received additional funds for things like land preparation and seed purchasing.
- This all means farmers should plant more cane in the upcoming pre-rainy season (May’21 to Jun’21).
- Those that already planted in the previous post-rainy season (Oct’20 – Dec’20) will potentially maximise their agricultural yields by applying more fertilizer.
- This, coupled with the fact that Thailand’s received a large amount of rainfall so far this year, means agricultural yields should increase by 15% year-on-year (at 10mt/rai).
What Does This Mean for Thai Sugar Production?
- With cane prices rising and the weather behaving, we think Thailand could produce 100m tonnes of cane next season, up 33.3m tonnes year-on-year.
- From this, the mills be able to produce around 11m tonnes of sugar, up 3.4m tonnes year-on-year.
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