Khon Kaen Sugar Industry Plc (KSL), Thailand's third-largest sugar producer by sales volume, expects sugar cane output for its factories to decrease by 10-15% to 5 million tonnes in the new 2023-24 crop year because of drought.
In the 2022-23 crop year, 6.4 million tonnes of sugar cane was produced.
The drop in sugar output will reduce KSL's production, but the firm remains positive about the industry's prospects.
"Sugar prices in the global market remain high at around 22 cents a pound, which will be good for the sugar industry," said Chalush Chinthammit, president of KSL.
The company expects Thai sugar cane output in the 2023-24 crop year to total 80 million tonnes, lower than the previous target of 100-105 million tonnes.
KSL expects its revenue this year to increase by 20%, up from 16.6 billion baht last year, driven by sales of a newly launched sugar product, said Mr Chalush.
The new sugar, marketed under the Kane's brand, has a low glycaemic index (GI), which is suitable for customers who need to control the sugar levels in their blood.
GI is a rating system for food containing carbohydrates and sugar. It shows how quickly each food increases people's blood sugar (glucose) levels when consumed.
The development of sugar with a low GI is the result of cooperation between KSL and Singapore-based Nutrition Innovation Co.
The company's production capacity for this new sugar product is 148 tonnes in 2023. It plans to increase the capacity to 2,000 tonnes next year.
"There is not a lot of cane left for making low-GI sugar after the cane-crushing period ended," he said.
KSL runs five sugar manufacturing plants in Khon Kaen, Loei, Sa Kaeo and Chon Buri.
The company's factory in Loei is going to be the first to produce low-GI sugar.
The facility in Sa Kaeo has been earmarked for a capacity expansion.
KSL is ranked third for sugar sales in Thailand, behind market leader Mitrphol Group and Thai Rung Ruang Group.
Matthew Godfrey, chief executive of Nutrition Innovation, a developer of innovative sugar products, said many other sugar companies in Australia, India, Africa and Brazil also developed sugar with a low GI.
"We see an opportunity in Thailand to develop innovative sugar products and decided to expand our business here," he said.
