Sugar retail prices likely to increase as costs rise

The retail prices of sugar may be adjusted following an increase in the ex-factory price by 1.75 baht a kilogramme as production costs surge.

The increase, which came into effect yesterday, was recently approved by a tripartite meeting of representatives from the government, sugar cane plantations and sugar factories.

The resolution will raise the ex-factory price of white sugar to 19 baht a kg, up from 17.25 baht a kg, and the price of refined sugar to 20 baht a kg, up from 18.25 baht a kg, according to a source at the meeting who requested anonymity.

“The retail prices of sugar will subsequently change, but the final prices will depend on each factory. They may cut the prices to compete with one another,” the source said.

The current market prices are 24-25 baht a kg.

“These prices are already high at a time when people’s purchasing power has yet to increase much,” the source said.

Sugar cane farmers want the government and factories to increase the ex-factory prices of sugar as they are shouldering more financial burdens, driven by expensive fertilisers and oil, as well as the hike in the daily minimum wage, the source said.

Their call comes as the global sugar price stands at 19 cents a pound.

The increase in the ex-factory prices of sugar is important as it will be factored into the calculation of prices for sugar cane sold to sugar manufacturers, said the source.

“The farmers expect the price of sugar cane, with a commercial cane sugar sweetness level of 10, to be 1,100 baht a tonne for the 2022-23 crop year,” said the source.

“They believe this price level is adequate for them to deal with higher living costs.”

The amount of sugar cane sent to factories is estimated to range from 100 to 105 million tonnes in the 202223 crop year.

Since Dec 1 last year, 57 sugar factories have begun to receive sugar cane from farmers.

Most of them are projected to stop the sugar cane-crushing process for this crop year by March.