Thailand Sugar Prices Spike, India Keeps Stability Despite Challenges
The Asian sugar market has seen significant price fluctuations, with Thailand experiencing a surge in December due to supply disruptions from mill closures, droughts, and disease, further impacted by China suspending sugar imports. Meanwhile, India’s sugar market remained stable despite a decline in production caused by weather conditions. With supply constraints and ongoing disruptions, sugar prices are expected to rise globally.
The Asian Sugar market experienced notable price fluctuations in recent months, driven by a combination of supply constraints, adverse weather conditions, and policy decisions. The prices surged in the Thai market owing to supply shortage however stabilized in the Indian market.
In Thailand, Sugar prices witnessed a sharp increase in December, marking a significant departure from the preceding month’s stability. This surge can be attributed to a combination of domestic supply disruptions and external trade challenges. The Ministry of Industry ordered the temporary closure of 57 Sugar mills until early January 2025 to address air pollution concerns caused by illegal Sugarcane burning. This measure, aimed at improving air quality and road safety, disrupted Sugar production and contributed to tightening supplies.
Adding to the strain, a severe drought earlier in the year weakened Sugarcane crops during their early growth stages, making them vulnerable to diseases like white leaf disease during maturity. These conditions resulted in reduced yields, further constraining the country’s Sugar output. Compounding the issue, China announced a suspension of syrup and Sugar blend imports from Thailand, effective January 3, 2025, with no exemptions. This decision has created significant challenges for Thailand’s Sugar industry as it navigates a critical period of supply chain adjustments.
In December 2024, India maintained relative price stability in its Sugar market despite production challenges. The Sugarcane crushing season progressed slowly, with production reported at 95.40 lakh tonnes, a noticeable decline from the previous year. Adverse weather conditions, including droughts earlier in the year and excessive rains during the growing and harvesting periods, significantly impacted crop yields in key Sugarcane-producing states such as Uttar Pradesh, Maharashtra, and Karnataka. Uttar Pradesh, India’s largest Sugar-producing state, saw a decrease in first-quarter production for the 2024–25 marketing year, falling to 3.28 million tonnes from 3.43 million tonnes in the previous year. However, steady domestic demand and government policies played a crucial role in stabilizing prices. The government’s measures, including regulating Sugar exports and maintaining buffer stocks, ensured a balanced supply-demand equation, preventing price volatility despite the challenges posed by lower yields and weather disruptions.
As per ChemAnalyst, the price of Sugar is expected to rise in the coming months, driven by ongoing supply constraints and adverse weather conditions affecting key production regions. Continued disruptions in major Sugar-producing countries, coupled with lower crop yields due to droughts and excessive rainfall, are likely to exacerbate supply shortages. Furthermore, trade restrictions and rising input costs may contribute to upward price pressure. With demand remaining steady, these factors will likely push prices higher, especially as global markets adjust to the tightening supply and fluctuating production levels.
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Source : Chemanalyst
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