Thai sugar stocks are expected to continue benefiting from a positive sentiment of low sugar production in India as the country’s production in the past several months shrank 7%.
A leading industry body said on Wednesday that Indian mills produced 14.87 million metric tons of sugar between October 1 and January 15, representing a 7% decline from the same period of the previous year. The decline was mainly due to lower output from its key states such as Maharashtra and Karnataka, two of the biggest producers in India.
Sugar production in Maharashtra fell 16.25% to 5.1 million tons from 6.09 million tons, while production in Karnataka dropped 12.7% to 3.1 million tons.
However, the National Federation of Cooperative Sugar Factories said in a statement that production in the northern state of Uttar Pradesh rose 14.8% to 4.61 million tons as mills in the state started operations early this year.
India is facing high inflation as both retail and wholesale prices inched up in December 2023 to 5.69% and 0.73%, respectively. However, the central bank of India said that inflation is coming down to its target of 4%.
As the general election is right around the corner, Prime Minister Narendra Modi is likely to opt to ban sugar exports to curb prices in the country.
India used to be the world’s second largest sugar exporter behind Brazil. However, its low production in recent years caused its rank to drop below Thailand, which replaces India as the second.
Thai sugar producers are Khon Kaen Sugar Industry Public Company Limited (KSL), Buriram Sugar Public Company Limited (SET: BRR), Khonburi Sugar Public Company Limited (SET: KBS) and Kaset Thai International Sugar Corporation Public Company Limited (SET: KTIS)
