Thailand Lowers Sugar Production Forecast by a Million Tonnes Amidst Dry Weather Woes

Thailand's sugar production is anticipated to be lower than initially expected for the 2023-24 season, largely due to dry weather conditions that have hindered cane growth. The Thai Sugar Millers Corp has revised its forecast, lowering the upper end of its production estimate from 8 million tonnes to 7.5 million tonnes. If these projections hold, it would represent a significant decrease of a third compared to the previous season's output. This reduction is primarily attributed to inadequate rainfall during the critical growth phase of the cane, as explained by Director Rangsit Hiangrat, who also noted the impact of climate change on these weather patterns.

The decrease in Thailand's sugar output is already affecting global markets, contributing to a surge in raw sugar futures, which saw their most significant monthly gain since April last month. Thailand, the world's third-largest sugar producer, is experiencing the lowest yield from crushed cane in over a decade, according to government data. As of February 1, the sugar recovery rate stood at about 9.9%, a decline from 11.8% in the last season. This decline is significant considering that over the past 12 years, Thailand has consistently produced over 100 kilograms of sugar per tonne of cane, indicating a recovery rate above 10%.

The Thai sugar milling season, which began on December 10, has seen 4.9 million tonnes of sugar produced from approximately 49.57 million tonnes of cane crushed. This production rate is considerably lower than in previous years, with the milling process expected to conclude earlier this year, either in February or March, as opposed to early April in the last season. These developments have led the Thai Sugar Millers Corp to adjust its production forecast for the 2023-24 season to between 7 million and 7.5 million tonnes, a decrease from their November estimate of 7 million to 8 million tonnes, and a significant drop from their initial September projection of 9 million tonnes.