The Internal Trade Department will ask the Sugarcane and Sugar Committee to consider stripping food manufacturers of the right to use sugar from the "C" export quota after finding that they had shifted to using cheaper sugar from the "A" domestic quota for their exports.
"The government must exact some punishment on food exporters that have not used their sugar quota from quota C by cutting out their right to use these sugar stockpiles for the next three years," Chutima Bunyapraphasara, director-general of the department, said yesterday.
The world sugar price has surged to US$750 (Bt24,765) a tonne, or about Bt27 a kilogram, while the domestic retail price is capped by the department at Bt22.50 a kilo for refined sugar. The unfair practice of food exporters, who used sugar from quota A in their manufacturing, has created a shortage in the country, she said.
The sugar price is expected to rise in a few years. Food exporters, which should use sugar from quota C, must be punished if they have not used the sugar allocated to them, she said.
From November-January, demand for quota A went up by 47 per cent from 1.9 million 100kg sacks to 2.8 million sacks, while demand for quota C dropped by 42 per cent from 170,000 sacks to 73,000.
Chutima said food exporters must use their quota allocation under quota C in order to balance supply and demand.
Once the domestic price goes up, those who are banned from using sugar from quota C would suffer.
To help alleviate the deficiency in the domestic market, the department is planning to ask for a special allocation of 400,000 sacks to supply domestic consumers. However, sugar should not be in short supply if food manufacturers used sugar from the right quota, she added.
Teams were sent out to inspect prices and stockpiles in the country, and sugar supplies were found to be still adequate for domestic consumption.
The retail price for pure refined sugar is also traded under a ceiling set by the department at Bt23.50 a kilo.
