Thailand slashed its forecast for 2016 sugar exports to 7.1 million tonnes, or 20 percent below year-ago levels, due to drought and higher domestic demand, a government official said. Lower overseas sales by Thailand, the world's second biggest exporter of sugar, should buoy global prices of the sweetener that have already hit 2016 highs on concerns over supply from top grower Brazil.
The Southeast Asian nation is expected to produce 95 million tonnes of sugarcane this year, or 9.6 million tonnes of refined sugar, Somsak Jantararoungtong, secretary-general of the Office of the Cane and Sugar Board, told Reuters. Around 2.5 million tonnes will be set aside for domestic use, he added. Last year, Thailand produced 105.96 million tonnes of cane and 11.34 million tonnes of sugar, of which it shipped out 8.89 million tonnes. This year, an ongoing drought in 15 out of 76 provinces and the worst water shortage in two decades is set to crimp output levels.