Serious Sugar Shortage Looms In Thailand

[george]

Serious sugar shortage looms

BANGKOK: -- The country will soon face a serious sugar shortage, as most millers have refused to supply the commodity to the Commerce Ministry for a special 80,000-tonne allocation aimed at easing the tight market situation.

Yanyong Phuangrach, permanent secretary to the ministry, yesterday said that since an agreement was reached late last month, only one miller had supplied 360 tonnes to the ministry. Other millers have refused to do so, on the grounds that their executives have not yet approved the allocation.

Last month, the Commerce Ministry was granted approval by the Industry Ministry's Cane and Sugar Board for a special allocation of 80,000 tonnes - or 800,000 sacks of sugar - to relieve the shortage and prevent a further spike in prices.

According to an Internal Trade Department survey, the retail price of refined sugar is currently quoted at Bt24-Bt30 a kilogram, against the controlled price of Bt23.50.

Some modern traders have complained to the ministry that they could run out of stock in the next three days because millers have not recently supplied them.

In a bid to ensure an adequate supply, the Commerce Ministry will soon seek the Industry Ministry's cooperation in urging millers to sell sugar to the Commerce Ministry under the terms of last month's agreement.

The ministry will also send teams to inspect sugar millers' stockpiles to prevent hoarding and price speculation.

If the ministry were to find any unfair practice, traders could face seven years' imprisonment and/or a Bt140,000 fine.

So far, the ministry has found that 20 provinces are facing an inadequate supply of sugar, while consumers are paying more than the controlled price in 50 provinces.

-- The Nation 2010-04-03

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[PhilHarries]

Sugar shortage?

No shit.............

<edit - dropped the aitch in shortage >

Edited April 3, 2010 by PhilHarries

[ManilaLover]

Actually this is good news, is'nt it ?

Not suprised either because there's a heavy overuse of sugar by locals who add big spoons of sugar to everything even their noodles.

Guess THIS can become the real spark that starts a civil war !

[Foggy Bottom]

The country will soon face a serious sugar shortage, as most millers have refused to supply the commodity to the Commerce Ministry for a special 80,000-tonne allocation aimed at easing the tight market situation.

Question - why does so much sugar have to pass through the hands of the commerce ministry rather than going direct to market?

According to an Internal Trade Department survey, the retail price of refined sugar is currently quoted at Bt24-Bt30 a kilogram, against the controlled price of Bt23.50.

Question - if the market price is currently running at 5% to 25% above the controlled price, why is the government trying to maintain the lower price which will return less income to the poor farmers at the "original source" end of the supply chain? Surely removing such controls would permit revenue flow to the producers and alleviate (at least partially) some of the causes of the red shirts being on the streets of Bangkok?

I guess the educated elites who run the country fail to see past their own garden fences?

[givenall]

Actually this is good news, is'nt it ?

Not suprised either because there's a heavy overuse of sugar by locals who add big spoons of sugar to everything even their noodles.

Guess THIS can become the real spark that starts a civil war !

Something else for the Red Shirt to add to demand.

[rreddin]

Actually this is good news, is'nt it ?

Not suprised either because there's a heavy overuse of sugar by locals who add big spoons of sugar to everything even their noodles.

Guess THIS can become the real spark that starts a civil war !

Many a true word has been spoken in jest.

Sugar is a commonly used seasoning in Thai cuisine. Add the sugar shortage to the effects of the drought on the incomes of farmers in the central region who may lose half a year's income (previous news item on TV forum of fears of the county's biggest dam running dry before the end of the hot season) and you have two difficult issues which, if not handled properly, will cause khun Abhisit's government to become very unpopular.

As you say, this could become the real spark.

[MILT]

The sugar may stay in a warehouse until the market quota is diminished where the price would shoot up and a profit would be realized? Another reason is that the trades on sugar as any commodity is all about locking prices. Thailand's current price would be fixed in the ministries coffers, thus forcing the mills out of the trade loop. Similar practices goes on with Thailand's Rice stockpiles. Still a huge money flow going on in commodities. If all was fair, the growers should see top price for their efforts. "How it looks to me" but I could be completely wrong!

[Yunnie]

Hmm maybe so the sugar market doesnt crash when everyone tries to undercut each other? I dunno... its been a while since I took economic... and I hated it. lol

Personally I see it as a good thing. Maybe that will teach them NOT to put sugar in EVERY single thing they eat. Soooo annoying when I have to find lime, lemon or something sour to counter the insane sweetness.

Might help with the child obesity popping up everywhere too... >_>

[rogerdee123]

The poor farmers are unlikely to benefit at all in regard to these higher prices. Look at the owners of the large industrial farms and and also at who owns the sugar mills if you want to see who is benefiting from manipulation of the sugar market in Thailand. The poor farmers get ripped off just like the poor consumers. The Govt is right to try to stop the manipulation of sugar prices (and other commodity prices) that benefit a few at the expenses of everyone.

[OzMick]

Actually this is good news, is'nt it ?

Not suprised either because there's a heavy overuse of sugar by locals who add big spoons of sugar to everything even their noodles.

Guess THIS can become the real spark that starts a civil war !

Many a true word has been spoken in jest.

Sugar is a commonly used seasoning in Thai cuisine. Add the sugar shortage to the effects of the drought on the incomes of farmers in the central region who may lose half a year's income (previous news item on TV forum of fears of the county's biggest dam running dry before the end of the hot season) and you have two difficult issues which, if not handled properly, will cause khun Abhisit's government to become very unpopular.

As you say, this could become the real spark.

Now there's some red shirt logic. Blame the government for the drought. Thaksin, being a god, would solve that problem.

[slimdog]

The first thing to understand is that Thailand does not have an actual sugar shortage. This year Thailand will produce approx 7 million tonnes of sugar, whereas the actual amount needed for domestic use is only approx 2 million tonnes.

The Governement has allocated 2 million tonnes for the domestic market throught the Department of Internal Trade, and 5 million tonnes for the export market through the Department of Commerce.

The reason that there is a domestic supply shortage is because of the difference in price between the domestic price and the export price.

Historically, export prices have always been slightly lower than the domestic price. Therefore the very big local food manufacturers have always bought their supplies from the export quota.

This year these same manufacturers have purchased their supplies from the domestic quota because it is cheaper, therefore the Department of Internal Trade is suffering a shortage.

The Department of Commerce has plenty of sugar, but for various reasons, the amount of sugar on the world market is lower this year, therefore, there is a very big demand. Companies which have been allocated an export quota are naturally reluctant to divert some of their sugar to the cheaper domestic market.

Hence the headlines of Sugar Shortages...

Edited April 3, 2010 by slimdog

[culicine]

Actually this is good news, is'nt it ?

Not suprised either because there's a heavy overuse of sugar by locals who add big spoons of sugar to everything even their noodles.

Guess THIS can become the real spark that starts a civil war !

Many a true word has been spoken in jest.

Sugar is a commonly used seasoning in Thai cuisine. Add the sugar shortage to the effects of the drought on the incomes of farmers in the central region who may lose half a year's income (previous news item on TV forum of fears of the county's biggest dam running dry before the end of the hot season) and you have two difficult issues which, if not handled properly, will cause khun Abhisit's government to become very unpopular.

As you say, this could become the real spark.

Now there's some red shirt logic. Blame the government for the drought. Thaksin, being a god, would solve that problem.

Yeah a drought in a tropical country. The problem is education (or lack thereof) of appropriate water and crop management. Let's see how they'd do in Australia, where they can go for up to 7 years in places without a drop of rain!

[OzMick]

one of the reasons may be produce diverted to gasohol production

[OzMick]

Actually this is good news, is'nt it ?

Not suprised either because there's a heavy overuse of sugar by locals who add big spoons of sugar to everything even their noodles.

Guess THIS can become the real spark that starts a civil war !

Many a true word has been spoken in jest.

Sugar is a commonly used seasoning in Thai cuisine. Add the sugar shortage to the effects of the drought on the incomes of farmers in the central region who may lose half a year's income (previous news item on TV forum of fears of the county's biggest dam running dry before the end of the hot season) and you have two difficult issues which, if not handled properly, will cause khun Abhisit's government to become very unpopular.

As you say, this could become the real spark.

Now there's some red shirt logic. Blame the government for the drought. Thaksin, being a god, would solve that problem.

Yeah a drought in a tropical country. The problem is education (or lack thereof) of appropriate water and crop management. Let's see how they'd do in Australia, where they can go for up to 7 years in places without a drop of rain!

That's why my place had 16000 gallons of tanks and a million litre dam, and you average thai place has about 400 L. the rainfall is way down this year, and it is hurting.

[mrbojangles]

The first thing to understand is that Thailand does not have an actual sugar shortage. This year Thailand will produce approx 7 million tonnes of sugar, whereas the actual amount needed for domestic use is only approx 2 million tonnes.

The Governement has allocated 2 million tonnes for the domestic market throught the Department of Internal Trade, and 5 million tonnes for the export market through the Department of Commerce.

The reason that there is a domestic supply shortage is because of the difference in price between the domestic price and the export price.

Historically, export prices have always been slightly lower than the domestic price. Therefore the very big local food manufacturers have always bought their supplies from the export quota.

This year these same manufacturers have purchased their supplies from the domestic quota because it is cheaper, therefore the Department of Internal Trade is suffering a shortage.

The Department of Commerce has plenty of sugar, but for various reasons, the amount of sugar on the world market is lower this year, therefore, there is a very big demand. Companies which have been allocated an export quota are naturally reluctant to divert some of their sugar to the cheaper domestic market.

Hence the headlines of Sugar Shortages...

A most excellent post, slimdog. Thank you

[tigermonkey]

Hmm maybe so the sugar market doesnt crash when everyone tries to undercut each other? I dunno... its been a while since I took economic... and I hated it. lol

Personally I see it as a good thing. Maybe that will teach them NOT to put sugar in EVERY single thing they eat. Soooo annoying when I have to find lime, lemon or something sour to counter the insane sweetness.

Might help with the child obesity popping up everywhere too... >_>

I agree wholeheartedly --- let them eat cake !

[gemini81]

The first thing to understand is that Thailand does not have an actual sugar shortage. This year Thailand will produce approx 7 million tonnes of sugar, whereas the actual amount needed for domestic use is only approx 2 million tonnes.

The Governement has allocated 2 million tonnes for the domestic market throught the Department of Internal Trade, and 5 million tonnes for the export market through the Department of Commerce.

The reason that there is a domestic supply shortage is because of the difference in price between the domestic price and the export price.

Historically, export prices have always been slightly lower than the domestic price. Therefore the very big local food manufacturers have always bought their supplies from the export quota.

This year these same manufacturers have purchased their supplies from the domestic quota because it is cheaper, therefore the Department of Internal Trade is suffering a shortage.

The Department of Commerce has plenty of sugar, but for various reasons, the amount of sugar on the world market is lower this year, therefore, there is a very big demand. Companies which have been allocated an export quota are naturally reluctant to divert some of their sugar to the cheaper domestic market.

Hence the headlines of Sugar Shortages...

youre in trouble when the domestic market is less important to you than the international market. look to china, japan, and the usa. the winner of tommorow is one who takes care of his own.

[andD]

what are sugar rooms

[jfchandler]

I know "honey pot"s.... but not "sugar room"s....

[dominique355]

Does a sugar shortage also mean that there will be a shortage of gasohol, the gasoline additive?

If I am not mistaken, gasohol in Thailand is made from sugar left-overs.