PM refuses request to lower sugar price at this stage

Abhisit said the price should remain high until the Cane and Sugar Fund had repaid its debt to the Bank of Agriculture and Agricultural Cooperatives (BAAC) in full.

Ever since then-industry minister Suwit Khunkitti announced a Bt5-a-kilogram increase in the sugar price last year, the FTI has been calling on the government to lower the price Bt2 to Bt3 a kilogram, because the higher cost had resulted in manufacturers of drinks and dairy products losing their competitiveness.

However, Abhisit said he would like to place priority on stabilising the Cane and Sugar Fund, which would help support |the cane and sugar industry in the long term.

"I think both consumers and manufacturers have managed to adapt, so it should not be a problem to maintain the present price," he said, adding that he had no plans to raise the sugar price any higher.

FTI chairman Santi Vilassakdanont said it was time for the government to consider lowering the price, because that would in turn help reduce the cost of living for consumers and production costs for manufacturers.

"It's difficult now for manufacturers in the soft-drink and dairy-products industries to maintain their position in the global market, because the price of sugar, one of their main raw materials, is higher than it is for competitors," he said, adding that this was resulting in declining exports of these products.

In May, the BAAC wrote the Office of the Cane and Sugar Board (OCSB) a letter saying it might not lend more money to the sector, because it had insufficient capacity to support loans to sugar mills this harvest season.

Therefore, the OCSB is not only seeking ways to pay off debt of Bt15 billion, but also considering allocating a part of the funds for loans to sugar manufacturers.

OCSB secretary-general Prasert Tapaneeyangkul said loan demand would be about Bt1.5 billion for the 2009-10 harvest season.