Thai production may hit record level

Thailand, the biggest sugar-exporting country after Brazil, may produce a record 7.7 million tonnes of the sweetener this year, according to the Thai Sugar Millers Corp.

The Southeast Asian nation will consume about 1.8 million to 1.9 million tonnes, leaving as much as 5.9 million tonnes for export, the group's executive chairman Vibul Panitvong told a news conference in Bangkok on Thursday. Thailand produced 6.8 million tonnes last year, of which almost 5 million tonnes were exported, he said.

The record Thai output may swell a global sugar surplus, which the International Sugar Organisation estimates will be about 11.05 million tonnes in the marketing year ending September 30. Increased exports may weigh on world prices as they recover from declines of 8 per cent last year and 20 per cent the year before.

Thailand's farmers will receive at least 700 baht ($21.1) a tonne for sugar cane this year, the government said on January 8. The price, which the farmers say is less than production costs, may be adjusted later this year.

Thai Sugar Millers Corp is owned by the country's 46 millers and represents the industry in shaping government policy.

"I am certain that next year the price of sugar cane will reach 800 baht a tonne given recent gains in futures contracts,'' Vibul said.

Normal weather and the current attractive sugar futures price were helping to boost output, he said. Thailand exports both raw and white sugar, mostly to Asia.

Raw sugar futures for March delivery rose 1.1 per cent to 11.57 cents a pound on ICE Futures US, formerly known as the New York Board of Trade, at 4:36 pm Bangkok time on Thursday. The price has gained 6.9 per cent this month.