Thailand, the world's second-biggest sugar exporter, has ended its 2011/12 crushing season and produced a record 10.2 million tonnes of sugar, the Office of Cane and Sugar Board (OCSB) said on Tuesday, adding that might lead to record exports this year.
Output was up from 9.6 million tonnes in the previous crop and higher than the forecast of 10.0 million tonnes. "That was the highest output we have ever had and we expect to have a record surplus of more than 7 million tonnes for export this year, too," the head of the OCSB, Prasert Tapaneeyangkul, told Reuters.
He added that after setting aside 2.4 million tonnes for domestic consumption, Thailand would have up to 7.8 million tonnes of sugar for export in 2012. Thailand exported 6.71 million tonnes in 2011, up from 4.42 million in 2010, according to Thai Sugar Millers Corporations Limited (TSMC)
Traders said they expected growing demand in Asia would be able to absorb the extra production. Between January to March 2012, Thailand shipped 470,000 tonnes of sugar, up 42 percent from the same period last year, according to TSMC data. However, traders and industry officials said the record production could pressure global prices and the Thai premium.
"There's a huge sugar surplus in the market, so prices are likely to go below 20 cents," said Lynette Tan, an analyst with Phillip Futures in Singapore, referring to New York sugar futures. New York raw sugar futures, which hit a 30-year-high of 36.08 cents per lb in February 2011, finished at 20.27 cents on Monday. Fears of falling demand, with a gloomy European economic outlook continuing to weigh on New York futures prices as supply rises, traders said the premium on Thai sugar was unlikely to rise significantly higher over the next few months. The premium on Thai raw sugar was offered at 160 points over New York raw sugar prices on Tuesday, up from 140-150 points last week.