Experts call for investments in Asian sugar farms
dubai — Many countries in Asia including China, Thailand, and India have the potential to expand their sugar production to meet rising global demand, however their efforts will depend greatly on the support offered by their governments, experts note.
Speaking at the Dubai Sugar Conference 2017, Gareth Forber, head of sugar research at LMC International, noted that while Asia has recorded a surplus in sugar production over the years, the region is achieving it less and less as of late.
Several analysts are cautiously forecasting a return to surplus in the 2017-18 period, however several factors can negatively impact the forecasts. The damage done by El Nino to crops in Asia is one such worry, along with other woes regarding Indian imports of sugar, and US President Donald Trump’s uncertain economic policies.
“El Nino has taken a toll on yields,” said Forber in his presentation at the event. “However, cane still looks like an attractive crop in Asia. If we should see a return to favourable weather, then we can expect a recovery in output. There are two factors that need to be looked at: the first is that sugar prices look good compared to alternative crops, and this should encourage farmers in Asia to plant cane in the first quarter of 2017. The second factor that we need to remember is that government policies in Asia continue to support cane and make it an attractive crop for farmers to grow.”
Speaking about the challenges that lie ahead for the sugar industry in Asia, Forber revealed that demand growth in the far East will put capacity under strain. “Unless China makes use of its capacity, consumption growth near that supply will not be enough to meet demand,” he cautioned.
The Indian subcontinent will face similar pressures, he added. “Our estimates show that while there is sufficient capacity for a number of years to come, this will not always be the case.”
The introduction of new mills in Thailand, Forber said, is a step in the right direction when it comes to balancing the demand in the market. However, the country will need to produce 17 million tonnes of sugar by 2020, and around 20 million tonnes by 2025 to balance the region’s demand. Government policies to encourage higher crop yields in all three countries will play a key role in the coming years, he stressed.
— rohma@khaleejtimes.com