NEW YORK: Thailand's sugar cane production is expected to rebound in the 2021/22 season as higher prices paid by mills to cane growers are seen boosting planting intentions, sugar trader and supply chain services provider Czarnikow said in a report on Thursday.

Czarnikow projects sugar cane production to increase by 30 million tonnes in 2021/22 (Oct-Sept) to 100 million tonnes, which will consequently boost sugar production in the country, one of the largest sugar exporters.

Thailand is currently processing its 2020/21 cane crop, which is the smallest in 10 years at only 70 million tonnes. Low prices in previous years and unfavorable weather reduced the crop for two consecutive seasons.

Thailand's relative absence in the global white sugar trade is one reason that prices for refined sugar reached a 3-1/2 year high this week.

According to the report, mills are paying record-high prices for the cane they buy from farmers this year, projecting a return on cane plantation of around $860 per hectare, which is more than returns for crops that compete with cane for farmers' preference, such as cassava and corn.

Czarnikow said weather conditions had also improved in Thailand, with rains expected to be 20% above historical levels for the February-April period, which would favor cane development.