Thailand, the world’s second-biggest sugar exporter, will start regulating domestic prices of the sweetener and scrutinize exports in an attempt to control inflation and maintain food security.
Prime Minister Srettha Thavisin’s cabinet on Tuesday approved the classification of sugar as a controlled commodity, which means any price changes or exports of one ton or more need to be first cleared by a regulating panel, according to Deputy Commerce Minister Napintorn Srisunpang.
Sugar futures in New York barely moved following the news. Prices are already near their highest in 12 years on tight global supplies. Thailand’s lead industry association said last month that exports will drop to 6 million tons next year from 8 million tons this year as drought is seen cutting output by almost a fifth.
India, the second-largest grower, also said earlier this month that it will continue its curbs on overseas shipments beyond Oct. 31, in order to protect local supplies. The Center-South region of top exporter Brazil, in the meantime, may have a record sugar crop this year and an even higher one next year, but bottlenecks are delaying shipments.
The Thai cabinet decision on Tuesday also overrode a move by the Office of the Cane and Sugar Board last week to raise farm-gate sugar prices by 4 baht per kilogram, which would have meant more income for farmers under a profit-sharing scheme between millers and cane growers.
The Ministry of Industry will now seek an alternative way to supplement cane growers’ income and expects to propose a measure in a cabinet meeting in two weeks, according to government spokeswoman Rudklao Suwankiri.