The price of sugar has risen to its highest level in 28 years due mainly to severe drought in many countries particularly India, which has resulted in shortage of supply in the global market.
Thai Sugar Millers Corporation (TSMC) said yesterday that the primary price of sugar cane for the new crop will hit Bt1,150 per tonne, which is the highest since 1982.
Prakit Pradipasen, chairman of TSMC, said the price will remain at these levels with increasing demand in the world market.
He added that sugar price in the world market had increased by 20 cent per pound due to decline in sugar production in many countries following drought.
"Sugar-price trading in the futures market has skyrocketed 24.78 per cent per pound in March 2010. If the price keeps rising, the final price of sugar cane should be higher than the estimated primary price of sugar cane of Bt950 per tonne for the harvesting season 2009/10," said Prasert Tapaneeyangkul, secretary-general of the Office of Cane and Sugarcane Board (OCSB).
If the final price of sugar cane is higher than the primary price, sugar manufacturers will need to pay the additional amount to sugar-cane growers for that season.
The primary price of sugar cane in 2008/09 was Bt830 per tonne, while the final price was forecast to be around Bt860 per tonne, he said.
He is confident the price of sugar cane in 2009/10 will be higher than last season, which should be higher than Bt980 per tonne.
The main factor pushing up the global sugar price was India, which has shifted from being a sugar exporter to importer because of the drought situation, he said.
"India's sugar stocks have been decreasing, from 9.3 million tonnes last year to 7.5 million tonnes this year. It will further drop to 5 million tonnes in 2010," he said.
The Indian Sugar Mills Association has estimated that sugar output in India would reach 19 million tonnes next year from 14.7 million tonnes this year.
However, it is believed that sugar production would be only 16 million tonnes next year because of poor sugar cane species and the impact of climate change.
India currently consumes around 22 million tonnes of sugar each year, which has tended to increase following the economic recovery and its huge population.
Vibul Panitvong, executive chairman of Thai Sugar Millers Corporation, said the price of sugar cane could rise to Bt1,100 per tonne in the year 2009/2010 due to the skyrocketing price of sugar.
"The higher sugar price will hike the total value of Thailand's sugar exports from US$1.5 billion (Bt51 billion) this year to $2.5 billion in the coming year," he said.
Besides India, he said the world's largest sugar exporter, Brazil, would also not be able to make up the shortage in supply despite boosting its sugar-cane output.
"The higher output will go towards serving 30 new ethanol plants in Brazil. Presently, 57 per cent of total sugar cane output in Brazil is used to produce ethanol, and the rest 43 per cent is used to produce sugar," he said.
Brazil is expected to increase its sugar exports from 31 million tonnes this year to 33 million tonnes next year.
Due to lower sugar export from India and other countries, it will be a good opportunity for Thailand to boost its exports and for local sugar-cane growers who will be able to sell the sugar cane at a better price.
The output of sugar cane in 2009/10 is expected to be around 71.6 million tonnes, up from 66.46 million tonnes in 2008/09 as a result of high rainfall. Consequently, sugar production will increase from 7.19 million tonnes to 7.64 million tonnes. However, Thailand's main obstacle is to improve sugar-cane yield and the structure of benefit sharing.
Vibul said Thai sugar manufacturers have expanded their business to neighbouring countries such as Laos and Cambodia because of limited agricultural areas in Thailand and tariff incentives to export to European Union countries.
He said Thailand's subsidy system has created price distortions and reduced the overall industry competitiveness.
In 2007, the Cabinet put the development of the sugar-cane industry on the national agenda, to be completed in three years.
"It's shameful that though we proposed an annual budget of Bt1.1 billion for three consecutive years, the government has not approved it at all. Therefore, it is difficult for us to move forward with the projects in the national agenda," Prasert said.
There are five development plans in the national agenda: research and development of cane species, value-added creation of by-products from sugar cane, productivity improvement, alternative energy, and corporate social responsibility.
Monday, August 31, 2009
Friday, August 28, 2009
East Water bullish on revenue as demand surges
Eastern Water Resources Development and Management Plc (EASTW) expects better performance this half from demand increases as production capacity show signs of improvement.
"Revenue improved 12% in the first half from higher water prices but this half could see even more improvement as raw water demand has jumped, especially in Rayong, our largest selling area," said chief executive Praphant Asava-aree.
East Water derives 63% of its revenue from raw water, 22% from tap water and the rest from services and drinking water.
It forecasts a yearly 8% drop in untreated water consumption this year from shrinking industrial production but the price increase helped offset and improve its yearly revenue by 12-15%.
Raw water demand is expected to drop 4% this year to 215 million cubic metres, while a 10% increase is expected next year to 233 million cubic metres as domestic consumption increases and petrochemical projects expand.
Net profit should also grow more than 15% from higher prices and lower cost.
Average water prices climbed 15% from last year to 9.10 baht per cubic metre. This average should remain stable until next year, according to a study to be issued early next year.
In the second quarter, East Water earned a net profit of 222 million baht, up 21% year-on-year and 4% from 214 million in the first quarter, as revenue rose 10% year-on-year to 729 million.
First-half net profit was 436 million baht (0.26 baht a share), up 15.61% from 377 million (0.23 baht a share) from a year earlier. The yearly dividend will be more than the 20 satang forecast earlier.
"We decided on 10 satang per share in the first half to be conservative, but since the economic situation seems to have improved, we should increase our return to shareholders too," he said.
Further cost cutting such as renting out building space is planned, while a five-year investment of 3.6 billion baht should improve its capacity to accommodate demand in the next 10 years.
For its raw water business, East Water is in the process of extending pipelines in Nong Plalai, Map Ta Phut and two other areas, while building its own reservoirs is being studied.
It also plans to extend coverage in areas of existing contracts and is studying the waste water management business.
The company also plans to install a mini-hydro turbine generator at its Prasae reservoir to generate extra revenue.
"We also hope to win a water-loss reduction project in Bangalore, India, and bidding results should be known by October. In addition, we should receive 900 million baht from the Irrigation Department for a pipeline between the Prasae and Khlong Yai reservoirs that we took charge of on behalf of the government. A disbursement this year would support our cashflow," he said.
Shares of EASTW closed yesterday at 3.82 baht, down four satang, in trade worth 4.59 million baht.
"Revenue improved 12% in the first half from higher water prices but this half could see even more improvement as raw water demand has jumped, especially in Rayong, our largest selling area," said chief executive Praphant Asava-aree.
East Water derives 63% of its revenue from raw water, 22% from tap water and the rest from services and drinking water.
It forecasts a yearly 8% drop in untreated water consumption this year from shrinking industrial production but the price increase helped offset and improve its yearly revenue by 12-15%.
Raw water demand is expected to drop 4% this year to 215 million cubic metres, while a 10% increase is expected next year to 233 million cubic metres as domestic consumption increases and petrochemical projects expand.
Net profit should also grow more than 15% from higher prices and lower cost.
Average water prices climbed 15% from last year to 9.10 baht per cubic metre. This average should remain stable until next year, according to a study to be issued early next year.
In the second quarter, East Water earned a net profit of 222 million baht, up 21% year-on-year and 4% from 214 million in the first quarter, as revenue rose 10% year-on-year to 729 million.
First-half net profit was 436 million baht (0.26 baht a share), up 15.61% from 377 million (0.23 baht a share) from a year earlier. The yearly dividend will be more than the 20 satang forecast earlier.
"We decided on 10 satang per share in the first half to be conservative, but since the economic situation seems to have improved, we should increase our return to shareholders too," he said.
Further cost cutting such as renting out building space is planned, while a five-year investment of 3.6 billion baht should improve its capacity to accommodate demand in the next 10 years.
For its raw water business, East Water is in the process of extending pipelines in Nong Plalai, Map Ta Phut and two other areas, while building its own reservoirs is being studied.
It also plans to extend coverage in areas of existing contracts and is studying the waste water management business.
The company also plans to install a mini-hydro turbine generator at its Prasae reservoir to generate extra revenue.
"We also hope to win a water-loss reduction project in Bangalore, India, and bidding results should be known by October. In addition, we should receive 900 million baht from the Irrigation Department for a pipeline between the Prasae and Khlong Yai reservoirs that we took charge of on behalf of the government. A disbursement this year would support our cashflow," he said.
Shares of EASTW closed yesterday at 3.82 baht, down four satang, in trade worth 4.59 million baht.
Thursday, August 27, 2009
Court to look into details of 76 industrial developments
The Central Administrative Court has ordered eight agencies to provide it with details of 76 industrial projects planned for development in Rayong's Map Ta Phut area.
The Stop Global Warming Association and 42pollution-affected villagers sought a court injunction to suspend the projects and their approved environmental impact assessment (EIA) studies.
The plaintiffs accused the National Environment Board and seven other agencies of not following the constitution's Article 67, which states a project seen as harmful to the environment and people's health must undergo public hearings before it could be endorsed.
The court refused to issue an injunction or conduct an emergency hearing of the case, but ordered the plaintiffs and the eight defendants to submit details of the 76 projects within 15 days.
Stop Global Warming Association president Srisuwan Janya said the court required the plaintiffs to show how the 76 industrial plants would harm local people's health and the environment.
The court also told the defendants to report on the construction process and potential impact of the projects,Mr Srisuwan said.
The Stop Global Warming Association and the villagers lodged a court complaint in June.
The case is pending trial.On Tuesday, the cabinet agreed to a Joint State-Private Committee resolution to allow agencies to proceed with issuing permits for industrial projects after it engaged in close legal consultations with the Council of State.
The cabinet resolution spurred the plaintiffs into seeking a court injunction to stop the issuing of permits,Mr Srisuwan said.
Sutthi Atchasai, a leader of the Eastern People's Network, which spearheads local people's fight against pollution in Rayong, said the villagers would hold a mass gathering at Map Ta Phut industrial estate on Sept 9 to pressure the government to follow Article 67 of the constitution.
The article requires the government to arrange for an independent environmental agency to give advice on implementation of projects that could be harmful to people's health and the environment.
Activists also urged the government to draw up a list of activities that are considered dangerous to people's health and the environment.
"It is going to be a very long protest which may have an impact on industrial activity if we don't get a clear answer from the government on how it translates Article 67 into action,"Mr Sutthi said.
Meanwhile, Industry Minister Charnchai Chairungruang yesterday shrugged off the court order, saying the ministry had followed health and environmental protection regulations when dealing with industrial development.
He said the ministry was working on a list of projects with a critical impact on health and the environment under Article 67.
The list would be submitted for cabinet consideration.
The Stop Global Warming Association and 42pollution-affected villagers sought a court injunction to suspend the projects and their approved environmental impact assessment (EIA) studies.
The plaintiffs accused the National Environment Board and seven other agencies of not following the constitution's Article 67, which states a project seen as harmful to the environment and people's health must undergo public hearings before it could be endorsed.
The court refused to issue an injunction or conduct an emergency hearing of the case, but ordered the plaintiffs and the eight defendants to submit details of the 76 projects within 15 days.
Stop Global Warming Association president Srisuwan Janya said the court required the plaintiffs to show how the 76 industrial plants would harm local people's health and the environment.
The court also told the defendants to report on the construction process and potential impact of the projects,Mr Srisuwan said.
The Stop Global Warming Association and the villagers lodged a court complaint in June.
The case is pending trial.On Tuesday, the cabinet agreed to a Joint State-Private Committee resolution to allow agencies to proceed with issuing permits for industrial projects after it engaged in close legal consultations with the Council of State.
The cabinet resolution spurred the plaintiffs into seeking a court injunction to stop the issuing of permits,Mr Srisuwan said.
Sutthi Atchasai, a leader of the Eastern People's Network, which spearheads local people's fight against pollution in Rayong, said the villagers would hold a mass gathering at Map Ta Phut industrial estate on Sept 9 to pressure the government to follow Article 67 of the constitution.
The article requires the government to arrange for an independent environmental agency to give advice on implementation of projects that could be harmful to people's health and the environment.
Activists also urged the government to draw up a list of activities that are considered dangerous to people's health and the environment.
"It is going to be a very long protest which may have an impact on industrial activity if we don't get a clear answer from the government on how it translates Article 67 into action,"Mr Sutthi said.
Meanwhile, Industry Minister Charnchai Chairungruang yesterday shrugged off the court order, saying the ministry had followed health and environmental protection regulations when dealing with industrial development.
He said the ministry was working on a list of projects with a critical impact on health and the environment under Article 67.
The list would be submitted for cabinet consideration.
INDUSTRIAL INDESXES SHOW IMPROVEMENT SINCE JANUARY
Thailand's industrial indexes have improved significantly since the start of the year, with the July manufacturing index contracting only 9 per cent year on year compared to 25.6 per cent in January, according to the Industrial Economics Office.
The index in February contracted 23.1 per cent year on year, March by 23.1 per cent, April by 12.8 per cent, May by 12.4 per cent and June by 6.8 per cent.
Arthit Wuthikaro, director-general of the office, yesterday said the month-on-month figures had also shown improvement since February, when the index rose 0.5 per cent from January.
In March, the index expanded 14.2 per cent month on month. Due to political violence, the April figure contracted 8.7 per cent, before expanding 9.2 per cent and 6.6 per cent in May and June respectively.
The July index, however, dropped 1.3 per cent from June.
Arthit said that despite the July reversal, the index should return to positive territory soon due to new orders in several industries and many plants having to increase capacity as a result.
July capacity utilisation stayed at 57 per cent, well above the trough of 50 per cent in February.
Hard disk drives are one sector for which the manufacturing index has increased for three consecutive months, as manufacturers have been able to offer new products to customers. They are, however, concerned about a labour shortage.
In the first seven months of the year, the sector's output and distribution dropped 6.3 per cent and 6.5 per cent respectively from the same period last year. The sector is expected to show positive growth in the fourth quarter.
The frozen-food sector in July also enjoyed growth in manufacturing and sales.
The index in February contracted 23.1 per cent year on year, March by 23.1 per cent, April by 12.8 per cent, May by 12.4 per cent and June by 6.8 per cent.
Arthit Wuthikaro, director-general of the office, yesterday said the month-on-month figures had also shown improvement since February, when the index rose 0.5 per cent from January.
In March, the index expanded 14.2 per cent month on month. Due to political violence, the April figure contracted 8.7 per cent, before expanding 9.2 per cent and 6.6 per cent in May and June respectively.
The July index, however, dropped 1.3 per cent from June.
Arthit said that despite the July reversal, the index should return to positive territory soon due to new orders in several industries and many plants having to increase capacity as a result.
July capacity utilisation stayed at 57 per cent, well above the trough of 50 per cent in February.
Hard disk drives are one sector for which the manufacturing index has increased for three consecutive months, as manufacturers have been able to offer new products to customers. They are, however, concerned about a labour shortage.
In the first seven months of the year, the sector's output and distribution dropped 6.3 per cent and 6.5 per cent respectively from the same period last year. The sector is expected to show positive growth in the fourth quarter.
The frozen-food sector in July also enjoyed growth in manufacturing and sales.
List of harmful industries due next week
A list of harmful industries will take effect next week as authorities hope to allay investors' concerns about requirements for environmental and health impact assessments, Industry Minister Chanchai Chairungruang said yesterday.
He said that while guidelines on environmental and health assessments for harmful projects were not yet finalised,those not on the list could follow existing environmental impact assessment procedures and proceed their projects.
"Once we put it up as ministerial announcement, we want investment to resume as fast as possible," he said.
Eight industries will likely be listed as harmful and will need extra environmental and community scrutiny.
The list includes all underground mining, all sizes of tin and manganese mines,steel smelting plants with at least 5,000 tonnes of daily capacity, and petrochemical plants with 1,000 tonnes of daily output.
The rules will also apply to industrial estates with steel or upstream or midstream petrochemical plants, all landfills or incinerators for hazardous waste, mineral smelting with chemicals, fossil-fuel power plants of 100 megawatts or more,natural gas or other energy sources of 500 MW and nuclear power plants.
He said that while guidelines on environmental and health assessments for harmful projects were not yet finalised,those not on the list could follow existing environmental impact assessment procedures and proceed their projects.
"Once we put it up as ministerial announcement, we want investment to resume as fast as possible," he said.
Eight industries will likely be listed as harmful and will need extra environmental and community scrutiny.
The list includes all underground mining, all sizes of tin and manganese mines,steel smelting plants with at least 5,000 tonnes of daily capacity, and petrochemical plants with 1,000 tonnes of daily output.
The rules will also apply to industrial estates with steel or upstream or midstream petrochemical plants, all landfills or incinerators for hazardous waste, mineral smelting with chemicals, fossil-fuel power plants of 100 megawatts or more,natural gas or other energy sources of 500 MW and nuclear power plants.
ALLIANCE WANTS HALT TO MAP TA PHUT PROJECTS
The Anti-Global Warming Association and 43 Map Ta Phut villagers yesterday petitioned the Administrative Court to freeze all petrochemical projects planned for the industrial zone.
They also asked the court to reverse the Cabinet's resolution on Tuesday that allowed the issue of operating licences to some petrochemical projects.
The opponents said the licensing did not abide by Article 67 of the Constitution.
Association president Srisuwan Chanya said the projects would cause trouble for the public and environment.
Under the Constitution, all of the projects must conduct both an environmental-impact assessment and a health-impact assessment along with a public hearing. An opinion from an independent environmental body is also required.
Villager Suthi Atchasai said if the petition received no satisfactory results, then on September 9 the Network of Eastern People would gather at the Map Ta Phut Industrial Estate.
"We don't want to block investment but want to ensure that all investment is in line with the Constitution. We may block the port and the industrial estate, as well as the sites for the new plants, in order to send a message to all that pollution problems are not yet addressed," he said.
Recently, the Industrial Estate Authority of Thailand (IEAT) awarded long-awaited operating licences to four industrial projects worth Bt17.55 billion, including one each to the PTT Group and the Siam Cement Group.
Besides the four approved projects, 19 worth Bt305.45 billion are awaiting IEAT approval and 13 worth Bt59 billion are pending approval from the Industrial Works Department.
They also asked the court to reverse the Cabinet's resolution on Tuesday that allowed the issue of operating licences to some petrochemical projects.
The opponents said the licensing did not abide by Article 67 of the Constitution.
Association president Srisuwan Chanya said the projects would cause trouble for the public and environment.
Under the Constitution, all of the projects must conduct both an environmental-impact assessment and a health-impact assessment along with a public hearing. An opinion from an independent environmental body is also required.
Villager Suthi Atchasai said if the petition received no satisfactory results, then on September 9 the Network of Eastern People would gather at the Map Ta Phut Industrial Estate.
"We don't want to block investment but want to ensure that all investment is in line with the Constitution. We may block the port and the industrial estate, as well as the sites for the new plants, in order to send a message to all that pollution problems are not yet addressed," he said.
Recently, the Industrial Estate Authority of Thailand (IEAT) awarded long-awaited operating licences to four industrial projects worth Bt17.55 billion, including one each to the PTT Group and the Siam Cement Group.
Besides the four approved projects, 19 worth Bt305.45 billion are awaiting IEAT approval and 13 worth Bt59 billion are pending approval from the Industrial Works Department.
PROTEST PLANNED AFTER COURT REJECTS COMPLAINTS
Map Ta Phut residents yesterday faced double blows in their efforts against expansion of an industrial estate in Rayong province - a request to temporarily delay the construction of 76 new factories was turned down, and a lawsuit accusing high-ranking officials of negligence in enforcing protective measures in the estate dismissed.
The Central Administrative Court's decision to turn down the first request has prompted protest leaders to threaten a mass rally on September 9 to blockade the Map Ta Phut estate and seaports connected to it.
Sutthi Atchasai said Rayong people did not want to hamper the massive investment in their home district but would like to see pollution-control conditions relating to the project were followed under constitutional requirements. "We are contemplating blockading the seaports and the estate, including the sites of the 76 new factories to be constructed soon," he added.
Sutthi led 42 villagers to submit a petition to the court yesterday morning asking it to issue an injunction to temporarily order a halt to the coming construction of the 76 factories in an expansion phase of the estate until new environmental impact assessment (EIA) studies were conducted.
The judges later ruled the court could not halt the construction but would wait for more information from authorities.
A companion petition was also lodged with the court accusing eight people - five Cabinet ministers and heads of three regulatory bodies overseeing pollution-control measures - of negligence that resulted in the construction of the 76 factories going ahead without new EIA studies.
The second petition also requested that the eight issue more pollution-control regulations and that three of the five ministers - overseeing Industry, Energy, and Transport Ministries - revoke licences already granted to construction projects outside the estate that would soon begin without EIA or other conditions being followed.
Srisuwan Janya, a lawyer allied with the villagers' group, who also represented two non-governmental organisations advocating environment protection and against global warming, said the eight violated laws by approving the construction without a public referendum and without giving mandatory approval for the setup of an independent body to study the projects.
The judges ruled in the afternoon that, in the first petition, the villagers failed to provide information on when exactly the construction would begin and end; and in the second petition, the court would wait for the eight to submit their case to the court.
The Central Administrative Court's decision to turn down the first request has prompted protest leaders to threaten a mass rally on September 9 to blockade the Map Ta Phut estate and seaports connected to it.
Sutthi Atchasai said Rayong people did not want to hamper the massive investment in their home district but would like to see pollution-control conditions relating to the project were followed under constitutional requirements. "We are contemplating blockading the seaports and the estate, including the sites of the 76 new factories to be constructed soon," he added.
Sutthi led 42 villagers to submit a petition to the court yesterday morning asking it to issue an injunction to temporarily order a halt to the coming construction of the 76 factories in an expansion phase of the estate until new environmental impact assessment (EIA) studies were conducted.
The judges later ruled the court could not halt the construction but would wait for more information from authorities.
A companion petition was also lodged with the court accusing eight people - five Cabinet ministers and heads of three regulatory bodies overseeing pollution-control measures - of negligence that resulted in the construction of the 76 factories going ahead without new EIA studies.
The second petition also requested that the eight issue more pollution-control regulations and that three of the five ministers - overseeing Industry, Energy, and Transport Ministries - revoke licences already granted to construction projects outside the estate that would soon begin without EIA or other conditions being followed.
Srisuwan Janya, a lawyer allied with the villagers' group, who also represented two non-governmental organisations advocating environment protection and against global warming, said the eight violated laws by approving the construction without a public referendum and without giving mandatory approval for the setup of an independent body to study the projects.
The judges ruled in the afternoon that, in the first petition, the villagers failed to provide information on when exactly the construction would begin and end; and in the second petition, the court would wait for the eight to submit their case to the court.
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