Thai sugar exports to South Korea are expected to rise by about 10 percent in 2010 due to the elimination of the Korean import tariff under a new free trade agreement (FTA), traders and industry officials said on Friday. Thailand and the other nine countries in the Association of South East Asian Nations (ASEAN) are expected to sign a free trade pact with South Korea in June, which should be effective from January 2010, a Thai Commerce Ministry official said.
"I expect at least a 10 percent rise in Thai sugar exports to Korea as a favourable import duty under the free trade agreement would attract Korean buyers to import more Thai sugar," one trader said.
Thailand, Asia's biggest sugar exporter, shipped 242,239 tonnes of sugar to South Korea in 2007, mostly raw. Under the agreement, South Korean sugar import tariffs would be slashed to zero from 3 to 10 percent now, the senior official said. ASEAN comprises Thailand, Indonesia, Myanmar, Malaysia, Brunai, Singapore, Vietnam, the Philippines, Laos and Cambodia.
"Among ASEAN members, Thailand is the only sugar producer that has surplus production to sell," the official said. However, traders expected South Korea to buy mostly raw sugar from Thailand rather than white sugar. "There are several refineries in Korea. I think they would be happy to buy raw sugar from Thailand to be remelted and re-exported to destinations in Europe," another trader said.
Thailand was expected to produce 76 million tonnes of sugar cane, or around 7.6 million tonnes of sugar, in the 2009-10 crop, according to the Ministry of Agriculture. Crushing usually starts in November and ends in April. Around 2 million tonnes are usually allocated for domestic consumption each year and the rest is for export.In the current 2008/09 season, Thailand produced 66 million tonnes of cane and 7.14 million tonnes of sugar.
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