Food and drink producers ask for a sugar subsidy

COMMODITIES

Food and drink producers ask for a sugar subsidy

VICHAYA PITSUWAN

The Federation of Thai Industries (FTI) wants the the Cane and Sugar Fund to subsidise sugar for food and drink manufacturers to help alleviate their troubles.

FTI chairman Santi Vilassakdanont yesterday told Industry Minister Mingkwan Sangsuwan that the food and drinks industry had been severely hit by sugar's price increase by five baht a kilogramme approved by the cabinet in April.

The industry asked the ministry to help, or its sales, production and growth would be affected, said Mr Santi.

''The industry uses 800,000 tonnes of sugar yearly, or 40% of domestic demand. Given the size of its consumption and the sugar price increase, its operating costs have increased dramatically,'' Mr Mingkwan said after the talks.

The industry asked the ministry to consider a special quota of low-priced sugar to food and drink manufacturers whose sales were for the domestic market. It also asked officials to review regulations so that local food and drink manufacturers could buy sugar for export, which is sold at lower prices, more easily.

The industry proposed that the Cane and Sugar Fund subsidise its sugar price by five baht a kilogramme now that the fund pays mills less after the price rise.

The fund's director declined to comment, saying he needed to look at the proposal carefully first.

The fund now has a deficit of 24 billion baht, owed by cane farmers who needed to borrow money as farmers received revenue from selling cane at a price that did not cover production costs.

The cabinet's approval of a higher sugar price was intended as an incentive for cane farmers to remain in business and produce enough sugar to meet local demand, support the ethanol industry and keep Thailand as a leader in world sugar exports.

Thailand is the second largest sugar exporter to the world market after Brazil.