China Syrup Ban: Thailand’s Sugar Industry Faces $57 Million in Losses
Thailand’s lucrative sugar syrup exports to China have halted, causing Thai producers losses now estimated at two billion baht (approximately US$57 million)—double initial projections. The ban, implemented in December by Chinese authorities citing hygiene concerns, has plunged the industry into crisis, threatening factory closures as early as next month. Negotiations between Thai and Chinese officials have yielded no results, increasing anxiety within Thailand’s vital sugar sector.
Thailand, the world’s second-largest sugar exporter, is China’s primary supplier of cane sugar syrup. Last year, shipments exceeded 1.2 million tonnes, highlighting the trade relationship’s significance. The unexpected import suspension has left Thai producers with mounting stockpiles and dwindling funds.
China’s request for Thailand to inspect dozens of its syrup and premixed powder production facilities before lifting the ban is the crux of the issue. Thai officials submitted a list of licensed factories, detailing food safety regulations, to China on January 14th, but have yet to receive a response. This silence fuels uncertainty and frustration among Thai producers. Two anonymous Thai government officials confirmed the lack of communication and reiterated Thailand’s willingness to meet China’s inspection requirements. Attempts to contact the National Bureau of Agricultural Commodity and Food Standards (the Chinese agency overseeing the matter) and the Chinese commerce ministry for comment were unsuccessful.
The ban’s financial impact is devastating. Todsaporn Ruangpattananont of the Thai Sugar Product Association, representing 42 sugar mills primarily supplying China, described a grim situation. Approximately 40,000 tonnes of syrup and premixed powder shipped to Chinese ports have been returned to Thailand, incurring significant shipping and transport costs, port fines, and reduced selling prices. These expenses doubled initial loss estimates, crippling an industry that typically purchases a million tonnes of sugar annually. Mr. Ruangpattananont warned that factory closures are inevitable if the impasse continues beyond March, with raw sugar purchases ceasing and operations stagnant for over two months.
The impact extends beyond large-scale producers. Thammasorn Nawilaijaroen, a senior executive at SMC Food Thailand and Hefty Food Thailand (which export syrup and premixed powder to China and Japan), reported combined losses of around 100 million baht. Hefty Food, exclusively exporting syrup to China (120,000 tonnes last year), has ceased production. Mr. Thammasorn expressed concern over 300 containers of returned syrup and the difficulty of finding alternative markets.
This trade dispute highlights global supply chain vulnerability to regulatory changes and the significant economic repercussions of such disruptions. The prolonged silence from Chinese authorities amplifies anxiety within the Thai sugar industry, leaving producers facing substantial financial hardship. Urgent resolution is needed to mitigate losses and prevent further damage to the Thai economy. The future of this crucial trade relationship hangs in the balance as Thailand awaits a response from Beijing.
