Sugar output in Thailand, the biggest exporter after Brazil, will exceed a forecast to reach a record after rainfall increased yields, boosting shipments to an all-time high, according to the Office of the Cane & Sugar Board.
Production may climb to 9.47 million metric tons in the year started Nov. 28 and exports will surge to 6.67 million tons, Secretary-General Prasert Tapaneeyangkul said in a phone interview today. That compares with forecasts of 9.11 million tons of output and 6.3 million tons of exports he made on April 20. Last year production totaled 6.93 million tons and shipments were 4.63 million tons.
Increased supplies from Thailand may pressure global prices that tumbled 36 percent since reaching a three-decade high in February as output climbs in Brazil and India, the world’s biggest producers. Sugar is the worst performer on the Standard & Poor’s GSCI Spot Index of 24 commodities this year, helping cool global food prices that the United Nations estimates fell in March from a record.
“The market didn’t expect such a strong output from Thailand and this will be bearish for sugar prices,” Abah Ofon, a commodities analyst at Standard Chartered Plc., said by phone from Singapore.
Raw sugar for July delivery dropped 0.7 percent to 23.24 cents a pound on ICE Futures U.S. in New York yesterday. The most-active contract climbed to 36.08 cents a pound on Feb. 2, the highest level since 1980.
Sugar production totaled 9.1 million tons between Nov. 28 and April 25 and cane output was 88.4 million tons, according to data from the website of the Office of the Cane & Sugar Board. Yield is estimated at 102.9 kilograms per ton of cane, more than the 101 kilograms a year ago, Prasert said.
“It will be a historical high level, as unseasonal rains from La Nina improved yields and high prices attracted farmers to increase plantings,” Prasert said. Full-year cane production may surge to 92 million tons compared with 88 million tons estimated last week, he said.
Output may reach as much as 9.8 million tons as Thailand is set to crush at least 95 million tons of cane, according to Sucden, the trading arm of Sucres et Denrees SA.
Nine out of 46 sugar mills in Thailand have ended cane crushing and the remainder may halt processing in May, said Prasert. The crushing season last year was over in April.
“I doubt whether we will see a big increase from now on as rainfall across plantations in northeastern provinces has disrupted the harvest,” Prasert said. “It is too wet for trucks to enter plantation areas and many millers are reluctant to continue crushing.”
La Nina brought unseasonal rain from the start of January, improving soil moisture and boosting cane output, according to the Office of Cane and Sugar Board. Rains were spread across the central, north and northeastern provinces, which account for 95 percent of Thailand’s total cane output, according to the nation’s weather bureau.