Thailand Sugar Market - Strategic Insights and Forecasts (2023-2028)

Thailand sugar market was valued at USD 1.287 billion in 2021 and is expected to grow at a CAGR of 2.18% over the forecast period to be worth USD 1.497 billion by 2028.

Thailand is one of the world's leading sugar producers, with a long history of cultivating sugarcane and producing sugar. The country has a favorable climate for sugarcane cultivation and a well-established infrastructure for processing the raw material into sugar. As a result, it has become a major player in the global sugar market, exporting large quantities of sugar to markets worldwide.

The Thai sugar industry is primarily based in the central and northeastern regions of the country, where sugarcane is grown on large plantations. The industry is dominated by a small number of large companies, which control much of the country's production and distribution of sugar. These companies operate large-scale sugar mills and refineries, capable of processing millions of tons of sugarcane each year.

The Thai sugar market is highly competitive, with domestic producers competing against each other and against foreign producers in both domestic and international markets. The market is subject to fluctuations in global sugar prices, which can significantly impact Thai sugar producers' profitability.

In recent years, the Thai sugar industry has faced increased competition from other sugar-producing countries in the region, such as Indonesia and Vietnam, which have been expanding their production and exports of sugar. Despite these challenges, the Thai sugar industry has remained a major contributor to the country's economy, providing employment for hundreds of thousands of people and generating significant revenue through exports. With a favorable climate, established infrastructure, and strong industry players, the Thai sugar market is likely to remain an important player in the global sugar market.

Thailand Sugar Market Growth Drivers:

• Thailand experienced favorable weather conditions for sugar production in the recent marketing year (2021-22), including adequate rainfall and optimal temperatures.

These conditions allowed for the healthy growth of sugar cane crops, resulting in increased yields and higher sugar production. The favorable weather conditions have contributed to the recovery of Thailand's sugar market after two consecutive years of drought, enabling the country to return to its normal production levels and maintain its position as one of the world's leading producers and exporters of sugar.

• They are increasing investments in modern agricultural practices and technology.

Adopting advanced farming techniques, such as improved irrigation systems and mechanized harvesting methods, has led to higher yields and increased sugar production. Furthermore, the government's initiatives to promote sugar cane cultivation, including providing subsidies and support to farmers, have incentivized farmers to expand their sugar cane production.

The expansion of sugar cane cultivation and increased investment in modern agricultural practices have contributed to the overall growth in sugar production in Thailand, helping the sugar market to rebound from the effects of previous years' droughts and meet the global demand for cane sugar. As a result, Thailand's sugar industry continues to play a vital role in the global sugar market, with increased production levels in MY 2021-22, positioning Thailand as a key player in the international sugar trade.

• Efforts by the government to support sugar cultivators through funding and investments have also substantially benefitted the Thailand sugar market.

In May of 2021, Thailand's government sanctioned a subsidy amounting to 6 billion baht, equivalent to 192 million USD, to incentivize sugarcane farmers to refrain from burning their crops and instead deliver fresh cane to sugar factories, thereby reducing air pollution. The subsidy above was disbursed through the Bank for Agriculture and Agricultural Cooperatives (BAAC) to about 300,000 farmers at 120 baht per ton during the 2020-2021 harvesting season.

The ultimate objective was to feed at least 56 million tons of fresh sugarcane to sugar factories nationwide, corresponding to approximately 80% of the total cane production. The program aimed to decrease the amount of burned sugarcane fields to less than 5% during the 2021-2022 crop year and eliminate it by 2023-2024. In addition, due to the drought that affected sugarcane output, Thailand approved an assistance package of 10 billion baht (or $319 million) in June 2020 for its sugarcane farmers. The government projected that roughly 300,000 sugarcane farmers would benefit from the financial aid.

Thailand Sugar Market Scope: