Thai sugar cane farmers are taking a hit from the worst drought in Thailand in more than twenty years. As the world's second-largest exporter of sugar, the drop in exports is contributing to forecasts for a widening global supply deficit this year, and fuelling a rally in international prices. Hayley Platt reports.
It's harvest time for Thailand's sugar cane. The country is the world's second-largest exporter of the sweet stuff. But this year shipments are expected to be down 20 percent. It's thanks to El Nino - a warm weather cycle which is wrecking havoc on crops, causing the country's worst drought in 20 years. (SOUNDBITE) (Thai) SUGAR CANE FARM OWNER, PRASERT JITKHAM, 60, SAYING: "The drought has resulted in the crops not growing, allowing the pests to eat all its roots. There's no rain to help the roots grow, so the sugar cane can't grow to its potential height." This sugar mill in Ratchaburi would normally produce up to 14,000 tonnes of cane per day. But the drought means it will be running at 25 percent below capacity. The dry conditions also make the cane less sweet so mills need to produce the same amount of sugar to compensate. But the farmers are paid less per tonne. (SOUNDBITE) (Thai) MANAGER OF BANPONG SUGAR FACTORY, PRASONG RUENTHONG, SAYING: "We have a huge quota for export but we don't have enough supply to meet the target. We're still missing about 300,000 tons of sugar cane to produce sugar." And many farmers don't see the situation improving. (SOUNDBITE) (Thai) SUGAR CANE FARMER, KAMOL KRATAITHONG, 38, SAYING: "With weather of 40 degrees and no rain, the sugar cane can't survive. Eighty percent of the crop was damaged this year and next year, I think it will be worse." International prices have been rallying. Last week reaching a 17 month peak. But that's no help to farmers who've lost 20-30 per cent of their output and are struggling to keep up with demand.