Sugar Cane

[Gary A]

We have decided to plant 10 rai of sugar cane this season. Ethanol production is putting a lot of pressure on sugar prices so maybe the cane price will be pretty good. Opinions?

[RamdomChances]

All the guy's with sugar cane in are walking around with smiles on their faces this year, I was chatting to one the other day and he reconed the price has doubled over last year (he did tell me the price/ton but I can remember off the top of my head). Wether it will hold at this price I could'nt tell you....time will tell, but it's not a bad crop anyway with minimul work required to grow it.

[Gary A]

Apparently it's a three year crop around here. The first year brings the biggest harvest the second and third year progressively smaller. My plans for a pond were discouraged so water was a big consideration. I'm now looking at a drilled well. There is no electricity available so that is also a problem getting the water out of the well.

[RamdomChances]

I've been told its 4 around here, but your right it does get progressively smaller. How about a windmill for pumping water, I've seen a few about but dont know how effective they are, we had to go down 60 meters for ours so I dont think it would of been any good here.

[Gary A]

That's a great thought. I could possibly put in a well and a windmill then dig a pond around the well. I could have my leaky pond and maybe keep it full too. We don't get much wind but when we do have a breeze it can be quite brisk.

I've been told its 4 around here, but your right it does get progressively smaller. How about a windmill for pumping water, I've seen a few about but dont know how effective they are, we had to go down 60 meters for ours so I dont think it would of been any good here.

[chownah]

I don't want to discourage you, but a windmill is not likely to pump enough water to irrigate 10 rai of sugarcane, is it? Doesn't sugarcane require alot of water?....and even if it doesn't require alot of water, 10 rai is a lot of land to irrigate even to a moderate level.

[RamdomChances]

I might be wrong but I read it as two seperate subjects and that Gary is going to plant sugar cane because he does'nt have enough water for irrigateion.

Anyway, sugar cane does'nt need irrigation, its a once a year plant and forget crop (more or less), harvested around this time of yearsupposed to be relitivly expencive to put in but will last 3-4 years, just cut and let it re-grow. It popular with absentie farmers as it requires very little looking after.

I would'nt of thought a wind generated pump to be enough for irrigation, but may well be enough to keep a leaky pond toped up

RC

[Gary A]

I'd really love to have a nice pond for fish and recreation but I have been told a pond there would most likely not hold water very well. I don't want an empty pond like a lot of them are in this area. If the windmill would keep the pond full it would do what it was installed to do. I'm not worried about cost effectiveness or the economics of it.

If it would pump more water than the pond needs then it could go to irrigate a small patch. I would never expect it to pump enough to irrigate 10 rai.

[chownah]

I'd really love to have a nice pond for fish and recreation but I have been told a pond there would most likely not hold water very well. I don't want an empty pond like a lot of them are in this area. If the windmill would keep the pond full it would do what it was installed to do. I'm not worried about cost effectiveness or the economics of it.

If it would pump more water than the pond needs then it could go to irrigate a small patch. I would never expect it to pump enough to irrigate 10 rai.

If cost effectiveness is not an issue then you might consider a generator to power a pump.

I went out on the internet to check out the water requirement for sugarcane since I'm sure that I read before that it requires alot of water. I was very surprised to find that some sites indeed said that it was a water guzzling crop while other sites indicated that it could be dryland farmed. I don't know why there is such a difference of opinion on this....maybe this means that if it is too dry to dryland it then it takes alot of irrigation...don't know. Anyway...you sort of indicated that they grow it around where this land is so I guess if they do it without irrigation there then you can too. .....just goes to show you that there is always something new to learn in farming.

Edited February 2, 2006 by chownah

[Gary A]

I don't know of any sugar cane in this area that is irrigated. It is planted on land that is not well suited to rice (hilly). The crop this year looks very lush. I'm not interested in using any sort of energy to keep the pond filled other than a windmill. In any case mother nature will have to provide for the sugar cane.

[Martin]

I am half way between Udon and Khon Kaen, in a part where a lot of sugarcane is grown and taken to 3 factories. (One at Kumpawapi Town, one on Highway 2 near Kumpawapi, and one at Nam Phong.)

It is very noticeable that the cane is grown on the higher parts that are self-draining, and rice is grown in the hollows.

I have always assumed that this is because sigarcane can't withstand standing in water after big thunderstorms. Is this so?

What amazes me now is that I see trucks bringing some cane down from north of Udon, and some from south of Khon Kaen. How can it be worthwhile to withstand the costs of a journey of over 50km to the factory?

[Gary A]

From where I live there is a place about 5 kilometers north of me that collects the cane. The cane is transported there by tractor, Kubota trucks, pick up trucks and many other ways that are rather unusual. At that point the cane is loaded onto 10 wheel trucks with a trailer. These are the overweight overloaded trucks you see going down the highway at about 30 kilometers per hour. They go from here to Chum Pae which is about 90 kilometers away. Transport is obviously a major expense.

[Carmine6]

Wikipedia says this:

"Sugarcane cultivation requires a tropical or subtropical climate, with a minimum of 600 mm (24 in) of annual moisture... In prime growing regions, such as Hawaii, sugarcane can produce 20 kg for each square metre exposed to the sun."

If you timed the planting right the first year it sounds like you'd be fine. Dry season is probably tough on the plants, but if you're harvesting then anyway, their water needs would be pretty low. As for timing, I was wondering this myself. Brazil is the #1 exporter and is supposedly trying to immunize itself from oil prices through ethanol. That's a pretty big economy, so I'd think they'll stay the course even if oil drops. 50km to transport cane? Try thousands of km to get Brazilian sugar to the US and the economics for keeping it there are pretty good.

Guess the starter shoots are probably worth a lot more this year though. That might be the only crappy part. But if you can plant once and harvest 3 or 4 times, not a bad deal. If prices crash, set up a still and sell to the local gas station, or and flavor for local consumption.

[Gary A]

According to my wife you plant at the start of the rainy season and the ample rainfall during the rainy season gets the cane off to a good start. She says the starter shoots are not that big of a problem. Planting is VERY labor intensive also but she says the herbicides and insecticide are the expensive items.

Wikipedia says this:

"Sugarcane cultivation requires a tropical or subtropical climate, with a minimum of 600 mm (24 in) of annual moisture... In prime growing regions, such as Hawaii, sugarcane can produce 20 kg for each square metre exposed to the sun."

If you timed the planting right the first year it sounds like you'd be fine. Dry season is probably tough on the plants, but if you're harvesting then anyway, their water needs would be pretty low. As for timing, I was wondering this myself. Brazil is the #1 exporter and is supposedly trying to immunize itself from oil prices through ethanol. That's a pretty big economy, so I'd think they'll stay the course even if oil drops. 50km to transport cane? Try thousands of km to get Brazilian sugar to the US and the economics for keeping it there are pretty good.

Guess the starter shoots are probably worth a lot more this year though. That might be the only crappy part. But if you can plant once and harvest 3 or 4 times, not a bad deal. If prices crash, set up a still and sell to the local gas station, or and flavor for local consumption.

[RamdomChances]

According to my wife you plant at the start of the rainy season and the ample rainfall during the rainy season gets the cane off to a good start. She says the starter shoots are not that big of a problem. Planting is VERY labor intensive also but she says the herbicides and insecticide are the expensive items.

Snip

They usually get a machine in to plant them here, just after the first rains as you need the rain to soften the soil after the hot season. I'm not sure on the herbicides/insecticide and fertiliser requirments. I thought that it was relitivley small compared with other crops (peanut, maize ect), usually around here I think they spray herbicides after a couple of months when the plant is a few feet tall, just to keep the competing vegitation down. One of the main reasons people grow it around here is the ease of it, you can get a better return doing two crops (maize, sogham/sunflower or peanuts) but they take much more looking after in terms of ground work (ploughing ect) and herbicides/insecticide/fertiliser.

Here they usually just pull the 10 wheelers directly onto the land.

[Carmine6]

According to my wife you plant at the start of the rainy season and the ample rainfall during the rainy season gets the cane off to a good start. She says the starter shoots are not that big of a problem. Planting is VERY labor intensive also but she says the herbicides and insecticide are the expensive items.

....

Nice that they're not taking advantage of the higher price for sugar and raising prices for the shoots. Guess labor intensive is relative when the other major crop is rice. I don't think I could do 2 hours of planting either without passing out, and I've backpacked through the desert. Watching someone else plant by machine, I can go for.

The girlfriend's father says he wants me to live there and help with the farm, but luckily my skills are tad more valuable in non-agricultural pursuits. Good luck with the crop.

[Martin]

Near us, there is a depot that buys small loads of cane and then sends it in to the factory on ten-wheelers.

But it doesn't do much business.

The standard practice is, as 'Random Chance' says, for the ten-wheelers to be loaded on the fields.

They then drive off very, very carefully, because they are so top heavy and a lurch can easily end up with what my wife describes as "Truck sleeping"!

It is clear that, as well as sufficient rainfall, you need soil that is good enough for sugarcane.

We are in an 'island' of good soil that is about a 30 km square. The cane growing stops to the West, where the forested hills start, but on the other three sides it stops where clearly-poorer soil starts.

Sometimes I see an attempt at growing cane further away, in the poorer-soil areas, but it is always a low, thin crop.

Most of the cane trucks only do that, and are laid up from March to December.

Quite a few are fairly modern, but the 'standard workhorses' are a bulbous Isuzu model that appear to be about forty years old. I think they may have come, as new, with the contractors who built the roads, reservoirs and big runways around here at the time of the Indo-China War.

But there are just a small number that seem to be Japanese and much older.

My guess is that they arrived in Thailand in WWII between the invasion at the end of 1941 and capitulation in 1945. They may have been 'liberated' by enterprising locals!!

[BeauGeste]

Anyone have any idea of how much it costs to hire a planting machine?

[BeauGeste]

Thailand

Sugar

Sugar Shortage Situation

2006

Approved by:

Rodrick McSherry, Agricultural Counselor

U.S. Embassy, Bangkok

Prepared by:

Ponnarong Prasertsri, Agricultural Specialist/Russ Nicely, Agricultural Attache

Report Highlights:

Thailand’s domestic sugar shortage reflects a failure of government regulation to cope with the surge in international sugar prices and local speculation, despite more than enough domestic production. The attractive export prices have created upward pressure on domestic sugar prices. Thai consumers are buying white sugar at expensive market prices, regardless of the government sanctioned prices.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Bangkok [TH1]

[TH]

Domestic sugar shortage: a lesson from price distortion

The Government’s administration of domestic sugar prices is currently under challenge by the shortage of white sugar, which has been in extremely short supply for months. The shortage is caused by a surge in export prices that prompted sugar suppliers to secure sugar for export markets instead of domestic sales at the controlled prices. Also, the authorities are practically incapable of enforcing the Thai Cane and Sugar Act B.E. 2527 (A.D. 1984: Article 73) to regulate sugar suppliers to release white sugar stock to meet domestic consumption, despite more than enough domestic production. In addition, the difference between the controlled domestic prices and a surge in the international prices has drawn sugar into nearby countries illegally. The Government faces either raising domestic sugar prices by 3-5 baht/kg, or must revise the intervention program in order to solve this problem.

Production: Far Above Domestic Consumption Despite Drought-Impacted Crops

This year’s sugar production is expected to decline for the third consecutive year to 4.3 million tons due to lasting drought in major growing areas. Moreover, it will take the next few years for sugarcane production to recover, despite an attractive guarantee price, which has recently been increased to a record 800 baht/ton (roughly U.S.$ 20/MT). However, current market prices of sugarcane reportedly surged to around 1,100 – 1,200 baht/ton (roughly U.S.$ 28-30/MT) in line with global raw sugar prices, which have increased sharply to U.S. 14 cents/lb (roughly U.S.$ 309/MT). Millers are aggressively securing cane to fulfill their forward export sugar contacts.

Sugar production remains greater than domestic consumption, which is only around 2 million tons annually. Direct household consumption accounts for about 68 percent of total domestic consumption. Also, according to the Thai Cane and Sugar Act (Article 46), the authorities have to regulate sugar millers to prioritize sugar sales domestically through a weekly allocation of around 30,000 – 40,000 tons, far above average weekly consumption. After meeting this quota, sugar suppliers can then sell the rest of sugar internationally. Therefore, exportable supplies will likely be adversely affected by drought-related reductions in sugar production instead of local consumers if the Cane and Sugar Act regulations function well.

Cane and Sugar Administration: Decades of Policy Dilemma and Cause of Shortage

The Government’s sugar policy was created to support cane growers and sugar millers since the early 1980’s. Minimum farmgate prices of sugarcane have recently been revised up to a record 800 baht/ton (roughly U.S.$ 20/MT) in line with global raw sugar prices. Also, Thai consumers have paid for overly expensive sugar since the early 1980’s, as the Government controls domestic sugar prices, normally setting them higher than global sugar prices. This has helped make Thailand the number three world exporter of sugar. The current retail price of sugar has been raised to 13.25 baht/kg (roughly U.S. 15 cents/lb) for white sugar and 14.25 baht/kg (roughly U.S. 16 cent/lb) for refined sugar since June 2000, only the third upward revision in decades of price administration. However, global sugar prices have fluctuated over the past five years, while the controlled domestic prices remain unchanged. International sugar prices are currently around 5 baht/kg higher in the neighboring countries. As a result, white sugar is reportedly aggressively smuggled to the neighboring countries, particularly to Laos, Cambodia, and Burma. Normally, legal border trade accounts for only about 10 percent of total sugar exports under license. Also, the Government failed to regulate sugar suppliers to release weekly sales of 30,000 – 40,000 tons to the local market at the controlled domestic prices. Local consumers are inevitably adversely affected by the sugar shortages, made worse by the speculation of retailers in anticipation of another official upward revision of domestic sugar prices. White and refined sugar is reportedly sold at around 17-20 baht/kg (roughly U.S. 19-23 cent/lb), far above the controlled prices.

Cane growers and millers urged the Government to raise domestic sugar prices by another 3-5 baht/ton in order to solve the shortage problem at the expense of local consumers. Another benefit from an increase in domestic prices will be an easing of the huge debt burden of the Cane and Sugar Fund to the Bank for Agriculture and Agricultural Cooperatives of around 19 billion baht (roughly U.S.$ 475 million), accrued by the price support program during the past six years when market prices were lower than the minimum sugarcane prices. However, the Government still objects to this call, as well as to the call for sugar market liberalization, as the increase in sugar prices will eventually feed inflation, a risk to the Thai economy.

End of Report