Sugar production in Thailand, the second-ranked exporting
country, US officials said, warning over the threat of El Nino, which a range
of forecasters have rated as an increasing possibility this year.
The US Department of Agriculture bureau in Bangkok, in its
first estimates for Thai sugar in 2014-15, pegged production at 10.38m tonnes,
down 1.0m tonnes on this season's record figure.
The forecast of a decline reflects "anticipation of unfavourable
weather conditions", the bureau said, noting the prospect of an El Nino weather
pattern associated with below-average rainfall in many parts of South East
Asia, including Thailand's cane-growing heartlands.
"The Thai Meteorological Department expects below-normal
average precipitation in 2014 due to the high probability of El Nino-related
weather conditions in the latter part of the year," the bureau said in a report.
"This will likely reduce the average yield of sugarcane
production in the rain-fed areas, which account for 80-90% of total sugarcane
production, particularly during the stalk elongation stage.
Besides a forecast reduction of some 4% in the cane yield, the
average sugar extraction rate is expected to fall to approximately 100
kilogrammes per tonne of cane, from 108-109 kilogrammes for 2013-14.
Meteorologists are placing an increasing likelihood on the
prospect of an El Nino weather pattern, linked to warmer Pacific water
temperatures, starting this year, with the US Climate Prediction Center rating
the probability at more than 50% and the Australian Bureau of Metrology putting
it at more than 70%.
And the weather pattern typically causes a range of impacts
on crops, through drought in the likes of South East Asia, which depresses palm
oil production, and eastern Australia, a
major grain-growing area, while bringing too much rain for, for example,
Ecuadorian cocoa producers.
China's Meteorological Administration warned last week that
the El Nino may cause an "abnormally" cold summer for north eastern provinces,
potentially causing damaging frosts, as in the summers of 1957, 1969, 1972 and
However, not all El Nino's impacts are detrimental, with
Gail Martell at Martell Crop Projections noting that it "is a known rain-maker
for the central US", with wet and cooler weather positive for corn yields.
Thailand vs Brazil
The USDA bureau forecast a rise in Thai sugar exports in
2014-15 despite the smaller production, reflecting the extent of inventories
expected to be left over at the end of this season, and an easier trading regime,
with tariff rates on shipments to countries in the Asean trading bloc cut to 0-10%,
from the current range of 5-40%.
Thai sugar shipments next season will rise by some 500,000
tonnes to a record 9.4m tonnes, raw value, the bureau said.
The increase contrasts with a decline USDA staff have forecast
for Brazil, the top exporting country, with shipments seen falling 950,000
tonnes to a three-year low of 25.25m tonnes, following the drought in the main
Centre South cane-producing region.