Sugar supply flat as crop year nears close

MANILA, Philippines — As the current crop year comes to a close, local sugar supply has not improved significantly and is just enough to meet industry targets.

Latest data from the Sugar Regulatory Administration (SRA) showed that local raw sugar production only inched up 0.23 percent to 2.069 million metric tons as of mid-June.

The current production is almost the same level as the 2.064 million MT recorded in the same period in 2018. Sugar crop year starts every September and ends in August.

This is already close to the 2.071 million MT target. Ending inventory stock by Aug. 31 is expected to reach 437,000 MT.

Based on data on sugar production for crop year 2018-2019, output in terms of 50-kilogram bags totalled to 41.39 million from 41.29 million in the year-ago period.

The country’s raw sugar demand was also 18 percent lower at 1.68 million MT from the 2018 level of 2.04 million MT.

The total sugarcanes milled during the period was 21.72 million MT, lower by eight percent from the previous year’s 23.61 million MT.

In terms of refined sugar, production decreased by eight percent to 788,671 MT, from 860,893 MT recorded in the same period in 2018.

Further, mill gate price of the commodity continues to drop, declining 23 percent to P1,513 per 50-kilo bag from P1,971.

Retail prices, however, in some markets are still at P49 to a high of P60 per kilo.

Despite hitting the target this crop year, production is still going down compared to the past two crop years which reached 2.4 million MT.

The Philippines has allocated bulk of its target production for the crop year to the domestic market, with expected improvements in total output.

Next crop year, raw sugar production is expected to marginally improve to 2.2 million MT alongside the increase in sugar consumption.

Domestic food processing and beverage sectors will continue to expand while consumers adjust to the increased sugar taxes.

Almost all sugar produced in the Philippines is consumed locally where roughly 50 percent of domestic consumption is accounted for by industrial users, 32 percent by households and the remaining 18 percent by institutions.