As per latest by United States Department of Agriculture ( USDA) , the Thailand sugar production during MY2016/17 is expected to increase moderately to around 10 million metric tons as drought conditions, which have lingered since 2014, will likely slow production. The weather conditions are likely to limit sugar exports in MY2016/17 despite the establishment of new sugar facilities.
However, sugar exports in MY2015/16 are likely to continue to increase to 8.8 million metric tons, up 7 percent from MY2014/15 as exporters are likely to run down its inventories, particularly as world sugar prices rebound and drought conditions in sugar producing countries continue to exist. MY2015/16 sugar production is expected to decline to 9.7 million metric tons, down 10 percent from MY2014/15 despite an expansion in planting acreages.
The government is considering additional financial support to cane growers by offering direct payments of 160 baht per metric ton ($4.6/MT) while the state-run Cane and Sugar Fund still has to secure the funding to repay sugar mills under the MY2014/15 price support program as the market prices were lower than the intervention prices. The government approved 12 additional new sugar mills and the expansion of existing facilities under the 10-year Cane and Sugar Strategy (2015 - 2026). As a result, total production capacity is expected to increase to 1.1 million metric tons of sugarcane per day if all new and expanded sugar operations move ahead as designed.
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