- We think Thailand will crush 93.7m tonnes of cane next season.
- This is 6.3m tonnes lower than our initial estimate.
- Farmers are planting cassava thanks to strong Chinese demand.
Thai Cane Production to Rebound in 2021/22
- Thailand should crush 93.7m tonnes of cane next season, down 6.3m tonnes from our initial estimate.
- This is because competition from cassava has held strong, as China’s continued its efforts to re-establish its pig herd following the outbreak of African Swine Fever.
- With this, fewer farmers than expected planted cane instead of cassava between March and May.
- Strong Chinese demand has supported prices for chips and starch, making cassava an even more appealing option for farmers.
- We think Thailand will export 5m tonnes of cassava chip in total this season.
- Almost all of this should go to China’s ethanol plants, so its corn can be used to feed its growing pig herd.
- Nevertheless, Thai cane production should be far better than it’s been for the past two drought-hit seasons.
Also…Agricultural Yields Are On the Up
- We think Thailand’s agricultural yields will total 10.15 mt/rai this season.
- This is up 0.72 mt/rai from our initial estimate and just 0.27 mt/rai shy of the five-year average in the seasons leading up to the 2019/20 drought.
- A lot of farmers uprooted their dead (drought-hit) ratoon cane and replaced it with new cane, which helped yields.
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Also, Thailand’s received 518mm of rainfall so far this season, up 20% from the 30-year average.
- If rain continues to fall at the rate it is, Thailand could be graced with 1,600mm this season, which would bode very well for its cane.
- Finally, agricultural yields are improving as some mills are offering a record 1,300 THB/mt for cane next season.
- This means more farmers can invest in better equipment and fertilizer to maximise their yields (cane per rai).
What Does This Mean for Sugar Production?
- We think Thailand will produce 10.3m tonnes of sugar next season, up 2.74m tonnes year-on-year.
- We’ll talk more about what this could mean for Thailand and the world market shortly; stay tuned!
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