THAILAND, the world's second-largest sugar exporter, may ship a record 5.8 million tons of the sweetener this year, as production exceeds a government target after an increase in sugarcane prices.

"Output will beat our target because farmers have crushed more cane," said Suttinee Poopaka, deputy secretary general of the Ministry of Industry's Office of the Cane and Sugar Board. "Output this year will probably be 7.78 million or 7.79 million tons," she told Bloomberg News by telephone yesterday in Bangkok.

The board set the target for this year at 7.3 million tons before the crushing season started in late November. The government raised sugarcane support prices twice this year from 600 baht (US$19) a ton to 700 baht in January and to 807 baht in April.

Increasing output from Thailand may fuel concern that global supply is exceeding demand and weigh on raw sugar prices. Most-active sugar futures have dropped 23 percent in New York from a 19-month high of 15.07 cents a pound on March 3.

Global sugar stockpiles will be 1.6 percent bigger than expected this year, research company F.O. Licht said on March 27.

World output is forecast to exceed demand by 2.86 million tons in the 2008-2009 season, extending two straight years of surplus, Switzerland-based Societe Kingsman SA said in a report.

Thailand produced around 6.7 million tons of the sweetener last year, of which 4.7 million tons were exported, the ministry said.

Thai Mills raised production of sugar 58 percent in April from a year ago.