Dry weather shortens Thailand's cane season with 40% lower crush on year

Singapore — Thai cane crush season has ended with the last mill having closed operations this week, according to Thailand's Office of Cane and Sugar Board, with total cane crushed down 40% on the year at 74.9 million mt.

The drop in cane crushing comes as Thailand battles with drought and weak monsoon in the country's major cane producing region during the crucial growing season, leading to slower cane development and a reduction in sugar yield.

The cane crushing season, which usually ends in early May, ended early this year in late March due to the sharp reduction in cane crop.

Total sugar production in Thailand is expected to be at around 8.3 million mt for the 2019-2020 marketing year, according to estimates from trade analysts.

Domestic allocation is expected to be lowered by 4% to 2.4 million mt this year due to weaker consumption amid the coronavirus outbreak, a source from the Thai mill told S&P Global Platts.

"The tourism would take a hit while food and beverage industry will also be affected as the country goes into a lockdown till April," a source from the Thai mill told Platts.

The lower availability of Thai sugar has supported cash premiums for both Thai raw and refined sugar since the start of 2020.

Platts assessed Thai 45i container cargoes at $61/mt over London No. 5 May futures Thursday, higher by 190% since January 2, 2020.

With the weaker Thai sugar production this year, international exports is expected to dampen with exports estimated at around 5 million mt, trade sources said.