Sugar’s one-year high lifts KTIS outlook as Thai cane forecast falls

Global supply concerns push sugar to a one-year high

Global raw sugar prices climbed to their highest level in a year in August 2569, improving the earnings outlook for Thai sugar and bioenergy producer KTIS. The rally reflects concern about supplies from major producing countries, including reduced rainfall in India and weather risks linked to El Niño across several cane-growing regions.

KTIS executive Somchai Suwajittanon said the market was also closely watching Brazil, the world’s largest sugar producer and exporter. Brazilian mills can alter the share of cane allocated to sugar and ethanol, directly changing the volume of sugar available to the global market. Energy prices influence that decision by affecting the relative returns from the two products.

The tighter outlook has supported Thai sugar shares. KTIS led a sector-wide rise with a gain of 5.35%, followed by KBS, KSL and BRR. The move reflects expectations that higher benchmark prices could improve margins and the value of future deliveries, although KTIS stressed that commodity prices remain outside its control.

KTIS increases cane crushing and sugar output

KTIS reported total revenue of 6.2443 billion baht for Q3/69, which ended on June 30, 2569, up 3.4% from 6.0393 billion baht in the same period a year earlier. Net profit reached 344.1 million baht, according to RYT9 and Naewna.

The company’s three mills crushed 7.5 million tonnes of cane, compared with 6.4 million tonnes in the previous year. Sugar production increased to 8.3 million bags from 6.7 million bags, helping sugar sales revenue rise by 11.7% in the quarter. However, global sugar prices during the reporting period remained below the previous year’s level, limiting the revenue benefit from higher volumes.

Diversified operations provided additional growth. Ethanol revenue increased by 242.1% year on year as both sales volumes and selling prices rose. Revenue from bagasse pulp advanced by 20.7%. KTIS also said government support for biofuel consumption was helping ethanol demand, while domestic investment in molded-pulp container plants was supporting the bagasse-pulp business.

Thailand’s cane forecast falls to 98 million tonnes

Thailand’s national cane-production estimate for the 2569/2570 season has been reduced to approximately 98 million tonnes, down from 105.9 million tonnes in 2568/2569. El Niño could affect cane yields in several producing countries, while lower rainfall has added to concern about India’s crop.

Despite the expected national decline, KTIS believes its own cane intake can remain close to the previous year’s level because it has expanded its planted area. Somchai said rainfall in the company’s sourcing regions had not fallen enough to cause severe disruption and that KTIS expected to improve sugar yield per tonne of cane.

Higher prices help, but costs remain decisive

KTIS expects the sugar rally to support results through the remainder of 2569 and into 2570. Some sugar volumes have yet to be delivered and could benefit from higher prices. The company also has enough biomass fuel to support power generation through the end of the fourth quarter of fiscal 2569 in September.

The outlook nevertheless depends on variables that producers cannot set: rainfall, the Brazilian sugar-ethanol mix, energy prices and global demand. KTIS said its response would be to improve production-cost efficiency and protect margins across sugar, ethanol and pulp. For producers and traders, the reduced Thai crop forecast strengthens the price case, but KTIS’s higher crushing volume and broader revenue base show that operational performance will remain as important as the global benchmark.