Bangkok, Jan 22 - Thai sugar exports hit a record high of 5 million tonnes in 2008 and the same level is expected in 2009 as demand from traditional buyers remains healthy, the head of the country's millers' association said on Thursday.
"I think we could reach 5 million tonnes again in 2009 as several agencies forecast that world sugar consumption still exceeds production, which means demand could remain strong this year," Prakit Pradipasen, chairman of the Thai Sugar Millers Corporation, told Reuters in an interview.
Thailand, Asia's biggest sugar exporter, sold 4.5 million tonnes in 2007, up from 2.2 million in 2006 and 3.0 million in 2005, according to Commerce Ministry data.
It expects to produce around 73 million tonnes of sugar cane, or around 7.3 million tonnes of sugar, in its 2008/09 crop (November-April).
Thailand usually allocates 2 million tonnes for domestic consumption and the rest is expected to be exported, Prakit said.
The London-based International Sugar Organization (ISO) cut its 2008/09 (October/September) global sugar deficit forecast to 3.6 million tonnes from 3.9 million tonnes in November.
The ISO forecast a bigger 2009/10 global deficit at around 4.5-5.0 million tonnes due to shrinking output in the European Union and India.
"I expect buyers in Asia as well as in the Middle East will continue buying as world prices drop to attractive levels," Prakit said.
However, prices were not expected to stay firm as traders would have to cut their premium to compete in a price war, Prakit added.
"I don't think we could sell at as high a premium as in 2008 since the situation has changed and it seems like everything is tracking collapsing oil prices," he said.
Prakit said cheaper sugar from Brazil was likely to add to the pressure on the Thai sugar premium as falling freight costs helped boost Brazilian sugar sales in Asia.
In fact, Prakit said it was possible that Thai sugar would be sold at a discount at some point in 2009.
"I'm quite sure the premium will drop," Prakit said. "It's possible we might sell at a discount, but I can't tell you when."
The benchmark New York March raw sugar contract ended at 12.60 cents per lb on Wednesday.
The premium on Thai raw sugar was quoted at 55 points over New York prices on Thursday down from last week's 90 points and well below the 250 points quoted in mid-2008 when New York sugar surged to a record high above 15 cents per lb.