Sugar Industry Policy Commission to Abolish Direct Subsidies to Sugarcane Farmers, Proposing a Central Budget of 7 Billion THB to Compensate Farmers at 69 THB per Ton of Freshly Cut Sugarcane; Hopes for New Season Sugarcane Prices to Reach 1,000 THB.

Key summary

The Sugar Industry Policy Commission (OIC) has announced a strategic adjustment for the sugarcane and sugar industry, eliminating direct subsidies to sugarcane farmers based on quantity due to legal and financial constraints, as stipulated in Section 28 of the State Financial Discipline Act B.E. 2561. The OIC plans to propose to the Cabinet the allocation of a central budget of over 7 billion THB (7,081 million THB) to provide financial assistance to farmers who deliver 100% freshly cut sugarcane to factories at a rate of 69 THB per ton, covering an estimated 102 million tons of sugarcane. The remaining 51 THB per ton will be sourced from other sources, such as the Sugar and Cane Fund. The trend in sugarcane prices for the new production season (2026/2027) indicates a potential increase to reach 1,000 THB per ton, driven by tight global sugar supply and a recovery in global sugar prices nearing 21 cents per pound. Regarding environmental measures, the OIC stipulates that factories can accept a maximum of 15% burned sugarcane per day, with a ceiling of 5% for burned sugarcane throughout the year, and will suspend acceptance of sugarcane for 7 days during the New Year holiday, from December 27th to January 2nd.