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According to a Thai agriculture ministry official, sugarcane production for 2013 and 2014 was forecast at 105mn tonnes, up nearly two per cent from the previous year.
Investment analyst at Phillip Futures, Joyce Liu said that the increase could push sugar production above the latest forecast of 9.7mn tonnes by the Office of Cane and Sugar Board (OCSB).
“We will have more sugar in the market, so that will push prices down and increase availability,” added Liu.
Office of Agriculture Economy deputy secretary-general Surasak Pannop, however, told Reuters that it was too early to forecast sugar output and the ministry of agriculture will update the production forecast of major commodities in the second half of the year.
Pannop added, “We need to keep an eye on a possible dry spell in June-July and if it happens, it could cut sugar content in the cane and we would not have that much sugar.”
The recent sugarcane forecast is higher than markets had expected and tops the government’s January predictions for output of 100mn tonnes.