A DECLINE in unrefined sugar demand is expected to push sugar cane production to its lowest level in seven years in Myanmar.
According to reports in the Myanmar Times, the vice-chairman of the Myanmar Sugar and Sugarcane Product Entrepreneur Association, U Win Htay, said this was anticipated for the fiscal year of 2020-2021.
"Demand for sugar is too low now and traders are rushing to sell what's left in the warehouses at sale prices to avoid getting caught in the glut.
"As the plantation area is reduced, factories will gradually shut down and if this continues, we might have to import sugar for consumption instead as sugarcane farmers will not plant if it is not profitable."
Myanmar exports raw, unrefined sugar, which is produced from sugar cane, to China.
Few other countries import unrefined sugar from Myanmar, and as such, most of the sugar being produced now is used for domestic consumption.
To revive the local sugar market, Myanmar should invest in upgrading local factories and getting access to higher quality sugar cane seeds.
Currently, local food and beverage businesses are permitted to import refined sugar for their needs and the country imports some 10,000 tonnes of refined sugar from Thailand alone.
"If the demand is for refined sugar, then the government should set new policies to upgrade at least local factories to enable them to process refined sugar. If local businesses require refined sugar, they can contract with these factories for supply.
"This will help the local sugar industry to add value and reduce reliance on imports."
China however has raised import duties on Myanmar sugar to 85 per cent and cracked down on illegal traders by blocking off their usual trade routes since 2017, leading to the current oversupply.
Myanmar must also apply for permission to export fixed quantities of sugar and adhere to procedures when dealing with China.
As a result, sugar exports have dwindled over the past two years and recently ground to a halt.
The association expects farmers to reduce growing sugar cane, leading to a shrinking of sugar cane plantations for the fiscal year 2020-21 to just over 350,000.
This is is a decline of more than 20 per cent compared to seven years ago, and a record low for the industry.
Contributing to the decline is a lack of global demand for unrefined sugar.
Among the 29 factories in the country which produces sugar, only two factories owned by Myanmar Economic Corporation and a Thai business respectively, produce refined sugar.