- 31 May 2017
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- 30 May 2017
• Land windfall tax ceiling set at 5% Draft bill expected from FPO this year • NESDB and FPO expect output growth to continue • BoT tracking offshore inflows
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- 25 May 2017
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- 23 May 2017
• Developers dip in Q1 after 2016 tax incentives • EEC law runs into temporary roadblock
SWEET SUCCESS AHEAD
Lower costs under Afta open up new potential for Thai sugar producers at a time when world prices are at 28-year highs and rivals including Brazil and Australia face poor harvests.
Thai sugar producers see more opportunities to expand in overseas markets thanks to tariff reductions under the Asean Free Trade Agreement (Afta) and a global shortage that has pushed sugar prices to record highs.
According to the latest research by the United States Department of Agriculture (USDA), world sugar production for the 2009-10 crop year is estimated at 153.3 million tonnes, against consumption of 153.7 million tonnes.
The change in world production and trade patterns is highlighted by lower production in
However, the USDA forecast that output in
Prasert Tapaneeyangkul, secretary-general of the Office of the Cane and Sugar Board (OCSB), says the next two years will be golden years for sugar producers because
However, the UN Food and Agriculture Organisation (FAO) has indicated that Brazilian and Indian production should be sufficient to cover demand by the end of the marketing year.
The big advantage for the Thai sugar industry, though, will be zero tariffs under Afta, which should allow producers to export more widely at lower cost, since their logistics costs will be cheaper than those of main rivals
During the first 10 months of 2009,
However, Thai agricultural product exporters should beware of new players, especially
Among those investors are Thai companies looking to tap potential next door and control their costs.
Having successfully operated sugar mills in the challenging market of
The planned investment by Mitr Phol follows the opening of a mill in Cambodia by its SET-listed competitor Khon Kaen Sugar Industry (KSL) last month, which came at an opportune time as sugar prices are at a 28-year high.
Mitr Phol said that by investing in
The two neighbouring countries are among 19 developing nations entitled to duty-free sugar exports to the European Union under the Everything but Arms (EBA) programme.
KSL's hopes that its first shipment of brown sugar to the European markets would be made in May this year.
KSL's plant has a full cane-extracting capacity of 700,000 tonnes per year. Its maximum raw-sugar production amounts to 70,000 tonnes annually, of which 40% are expected to be processed into refined sugar in the future.
On the other hand, Mitr Phol sees these investments as providing a greater competitiveness to its operations.
"As a result, the company's competitiveness in neighbouring countries will be higher," said Mitr Phol Group chairman Isara Vongkusolkit.
"We plan to extend the growing area in
However, Mitr Phol has been unable to expand in
Mitr Phol has a 90-year concession for planting sugarcane by the Cambodian government, covering 100,000 rai. It is likely to invest 1-2 billion baht in the first phase.
Mr Isara said, however, that because the company's first investments were in
Mitr Phol also operates seven sugar mills in
Chamroon Chinthammit, the president and CEO of KSL, said sugar prices were expected to rise above 30 US cents a pound soon and remain high until 2011. Prices are being supported by high demand and short supply, as well as speculation by hedge funds to some degree, he said.
KSL this year inaugurated two new companies, Koh Kong Sugar Industry and Koh Kong Plantation in
Mr Chamroon also said the company was thinking about producing white sugar with a capacity of 300 tonnes a day with a total investment value around 300-500 million baht within the next two to three years.