February 7, 20265 views0 shares
Thailand's Sugar Exports Face Headwinds Amid Surging Domestic Ethanol Demand
Thailand, a major global sugar exporter, is confronting potential reductions in its sugar export volumes due to a significant rise in domestic ethanol production demand. The government's biofuel push aims to divert up to 15% of the 2025/26 sugarcane crop to ethanol, impacting the balance between sugar for food and energy. This shift could limit Thailand's ability to capitalize on high international sugar prices and tighten global supply.
Bangkok, Thailand – Thailand, a pivotal global sugar exporter, is encountering significant headwinds in its sugar export volumes as domestic demand for ethanol production continues its upward trajectory. The Thai government's renewed commitment to biofuel adoption, strategically aimed at reducing fossil fuel dependency and bolstering local agricultural sectors, is channeling a progressively larger share of sugarcane output towards ethanol distilleries. Industry analysts project that as much as 15% of the nation's 2025/26 sugarcane harvest could be earmarked for ethanol, marking a substantial increase from previous years. This pronounced shift is creating a tighter equilibrium between sugar production for direct food consumption and for energy purposes, potentially hindering Thailand's capacity to fully capitalize on robust international sugar prices. While this policy undeniably benefits local farmers and enhances energy security, it simultaneously imposes an additional constraint on the global sugar supply chain. Sugar millers are proactively adapting by optimizing their production lines to accommodate both sugar and ethanol output. However, the overarching long-term trend suggests a strategic recalibration of Thailand's role in the international sugar trade, likely resulting in diminished exportable surpluses. The Thai Sugar Millers Corporation (TSMC) has confirmed ongoing dialogues with the government to judiciously balance these competing demands.