The recent projection by the International Sugar Organization (ISO) of a global sugar deficit for the 2024/25 season has set the stage for a potential increase in Thai sugar stocks as market prices are anticipated to climb amidst the impending shortage.
Buriram Sugar Public Company Limited (SET: BRR) emerges as the sole sugar stock in the Thai market that has demonstrated positive performance this year, recording a 5.14% increment since the beginning of January.
In contrast, Thailand’s primary stock index, the SET Index, continues to lag, showing a 4% decline despite a recent uptick that saw the index rebound by 6% from a four-year low in early August, prompted by apprehensions of a US recession.
Furthermore, the performance of three other sugar stocks paints a less favorable picture for the year. Khonburi Sugar Public Company Limited (SET: KBS) experienced a 6.36% decline, Khon Kaen Sugar Industry Public Company Limited (SET: KSL) plummeted by 18.94%, and Kaset Thai International Sugar Corporation Public Company Limited (SET: KTIS) saw a notable drop of 21.05%.
The International Sugar Organization (ISO) released its initial evaluation for the 2024/25 season, foreseeing a worldwide sugar deficit of 3.58 million metric tons. This projection marks a significant shortfall in sugar production.
In a quarterly update, the inter-governmental organization revised its estimate for the expected deficit in the 2023/24 season (October-September) to 200,000 tons, compared to the previous forecast of 2.95 million tons disclosed in June.
The ISO highlighted a notable change in the South American region, particularly in CS (Centre-South) Brazil, where production has been shifted to an earlier timeframe before October. As a result, this adjustment led to increased production for the 2023/24 season but was identified as the primary factor causing a decline in production for the upcoming 2024/25 season.
