Drought killing next year's sugar crop

Exports down 20%, farmer debt piles up, some switch to less-water intensive tapioca after trying rice & sugar.

AGRICULTURE

Drought killing next year's sugar crop

Exports down 20%, farmer debts pile up
1/04/2016
Reuters News agency

RATCHABURI -- Prasert Jitkham stoops down and pulls a yellowed sugar cane shoot from baked soil. The worst drought in more than 20 years has killed the plant he should harvest next year.

EL NINO DAMAGE

The El Nino weather phenomenon has played havoc with crops across Southeast Asia and beyond. Thailand, the world's second-largest sugar exporter Thailand, will ship 20% less sugar to international markets this year than last.

Farmers also fear the damage already inflicted by the drought on young sugar cane plants could make next year's crop worse.

PRICES RISING

A drop in exports from Thailand and India has contributed to forecasts for a widening global supply deficit this year.

This has fuelled a rally in international prices to a 17-month peak last week and helping sugar outperform a commodity struggling with the slump in global oil prices.

DRY MAKES LESS SWEET, SO MORE SUGAR CANE NEEDED

"It's dead," Mr Prasert said, pulling the dusty shoot apart. "Worms have eaten up all its roots. They're all starting to die. This is the worst I've seen it since I started growing sugar cane in 1979."

International prices may have rallied but farmers are reaping no benefits. Mr Prasert and other sugar farmers in this central province say they have lost 20%-30% of their output this year due to the drought.

Dry conditions make sugar cane less sweet, so sugar mills need more to produce the same amount of sugar. That means they pay farmers less per tonne.

TAPIOCA NEEDS LESS WATER

Some farmers have turned to cultivating tapioca as an alternative crop.

Tapioca needs less water and generates an income that is similar to sugar.

DECLINING OUTPUT, DECLINING EXPORTS

Sugar cane output is expected to fall below 95 million tonnes both this year and next, compared with 105.95 million tonnes in 2014-15.

Thailand, which typically exports about three quarters of its sugar output, will ship out about 7.1 million tonnes in 2015-16, down from 8.9 million tonnes a year ago.

Sugar has rebounded from seven-year lows touched just last August.

SUGAR MILLS OPERATING BELOW CAPACITY

With cane output down, sugar mills and refineries are operating well below capacity.

Banpong sugar mill, a mid-sized plant in Ratchaburi, will run for only 90 days, 25% below its capacity 120 days. The plant can process 14,000 tonnes of cane per day.

FARMER DEBT RISES

As farmers get a lower yield from a smaller crop, more of them are falling into debt.

Of 400 farmers that sell their harvest to Mr Prasong's sugar refinery, 30 have for the first time failed to repay loans administered by the refinery for the crop year.

They are part of a growing number of rural Thais struggling with debt. Most are rice farmers, who were hit hard when the military seized power in 2014 and ended generous subsidies.

For the first time in 50 years of growing cane, farmer Hant Krataithong said he could not repay debt this year with income from his harvest. He spent a lot of cash on fertilisers to compensate for the drought.

The irony for some farmers in Ratchaburi is that they have taken a double hit: They were encouraged to convert to growing sugar from growing rice as the government sought to cut subsidy reliance and reduce massive rice stocks.

http://www.bangkokpost.com/business/news/918461/drought-killing-next-years-sugar-crop

สามารถฝึกอ่านออกเสียงและดูคำแปลได้ที่ : http://www.bangkokpost.com/learning/learning-from-news/918569/drought-killing-next-years-sugar-crop