Thailand should consider allowing local sugar prices to float with world sugar prices instead of a fixed price so as to ensure fairness to both producers and consumers, said Thailand's Kasikorn Research Center.
Following the raise of local sugar prices last week, the government should seek proper standards for fixing local sugar prices and carry out measures acceptable to sugarcane planters and consumers alike, according to a research report of the center.
Last week, the government gave a green light for an ex-refinery price rise of 3 bath per kg and approved fixing the new sugar price plus value-added tax, making the ex-refinery price for white sugar rise to 749 baht (18.7 U.S. dollars) per 50 kg from 588.50 baht (14.7 U.S. dollars).
The increase also led to a rise in retail white sugar price to 16.50 baht per kg from 13.25 baht starting from March 9.
The rise in sugar price will solve sugar shortage problem in the market, eliminate disputes on pricing between sugarcane planters and the government, enabling planters and sugar industries to earn more revenue, and helps them repay debts to financial creditors, said the report.
As a result of soaring sugar price, the country's revenues on sugar industries is expected to jump 4.62 billion baht (116 million U.S. dollars) this year and will further rise by around 6 billion baht (150 million U.S. dollars) in the following years, it said.
Sales of sugar this year are projected at 12.81 million sacks, almost the same as 2005.