The decline in cassava prices has forced farmers to turn to sugarcane! Thailand's sugar industry has reached a turning point again, with sugar production expected to increase significantly and export

Thailand is the world's second-largest sugar exporting country and is currently undergoing a transformation in its agricultural structure. According to Thai media reports, as cassava prices plummet by 37%, more and more Thai farmers are abandoning cassava cultivation and turning back to more economically efficient sugarcane cultivation. This shift indicates a significant increase in Thailand's sugar production, which may reach its highest level in seven years during the 2025/26 crushing season.

According to Mitr Phol Group, sugarcane production during the 2024/25 crushing season is expected to increase from the current 92 million tons to 105 million tons, and sugar production may reach 11.5 million tons. This prediction coincides with the views of industry analysts Marex and Green Pool. They all believe that with favorable weather conditions and increased yields, Thailand's sugar production during the 2025/26 crushing season could reach 13.2 million tons. Just looking at the data is meaningless, let's compare it with China: the sugar production in China during the 2023/24 crushing season was 9.96 million tons, which is less than 10 million tons.

The main driving force behind the expansion of Thailand's sugar industry comes from exports. The domestic sugar consumption in Thailand is relatively stable, maintained at around 2.5 to 3 million tons per year, which means that most of the new production will be used for exports, increasing the supply to the international market. If the sugar production reaches 13 million tons in 2025/26, it means that Thailand's sugar exports will reach the level of tens of millions of tons. Sugar companies are actively seeking overseas buyers, and the Thai government is also actively supporting the development of the sugar industry to enhance its competitiveness in the global market.

The increase in sugar production in Thailand will undoubtedly have an impact on the international sugar market. The increase in supply may lead to a global drop in sugar prices, providing opportunities for sugar importing countries to purchase at lower costs. At the same time, Thailand's sugar exports are also facing price competition pressure from the world's two largest sugar producing countries - Brazil and India. In addition, it is also facing bans from international buyers on abnormal trade, such as using syrup to achieve zero tariffs on export trade.

According to the latest data from the Thai Sugar Council, as of February 17, 2025, the sugarcane crushing capacity for the 2024/25 season in Thailand was 71.1 million tons, a year-on-year increase of 5.49%, lower than the previously expected 15% year-on-year growth. However, the market still has strong expectations for the growth of sugar production in Thailand, and it is widely believed that this will exert downward pressure on sugar prices. The Thai Sugar Council estimated in October last year that Thailand's sugar production during the 2024/25 crushing season would increase significantly by 18% year-on-year, reaching 10.35 million tons.

The phenomenon of Thai farmers switching from cassava to sugarcane highlights the cyclical nature of agricultural products, and the Thai sugar industry has reached a new turning point. This turning point demonstrates the dynamism of the agricultural market and farmers' ability to respond to market signals. As more farmland shifts from cassava to sugarcane cultivation, Thailand is expected to consolidate its position as a major global sugar supplier in the coming years. However, this development also brings challenges to market balance and price stability, requiring industry participants and policy makers to closely monitor and formulate corresponding strategies.