Sugar output seen lower next crop year

MANILA, Philippines — The country’s raw sugar output may drop by 50,000 metric tons (MT)  in the coming crop year mainly due to lower fertilizer use amid rising prices,  according to the United States Department of Agriculture (USDA).

In a report, the USDA-Foreign Agricultural Service (FAS) said raw sugar production may decline to two million MT in the next crop year, which will start in September 2022 and end in August 2023.

“This is attributed to lower fertilizer usage because of rising fertilizer prices leading to lower yield,” the USDA said.

Fertilizer prices in the international market have been rising since May last year mainly due to larger demand from countries, as well as higher freight cost.

Latest data from the Fertilizer and Pesticide Authority (FPA) showed that the average retail price of prilled urea stood at P2,913 per 50-kilo bag from April 11 to 15.

This is more than double the P1,117.64 per 50-kilo bag price in the same period last year.

The USDA also revised downward its sugar production forecast for the current crop year to 2.05 million MT from 2.1 million MT.

Earlier this month, the Sugar Regulatory Administration (SRA) said that its final crop estimate for the current crop year, which ends in August, is also projected to drop further to 1.982 million MT from an earlier estimate of 2.072 million MT as of Jan.20.
 “Typhoon Rai (local name Odette) hit the central area of the country in December 2021, affecting new plantings and damaging the standing crop in approximately 51,000 hectares,” the USDA said.

Data from the Department of Agriculture-Disaster Risk Reduction and Management Operations Center showed that sugarcane damage due to Typhoon Odette totaled P1.15 billion, accounting for 8.6 percent of the total agricultural damage.

“Area planted in market year (crop year) 2023 is expected to remain flat at 390,000 hectares, with low productivity and high input costs constraining growth,” the USDA said.

The USDA said sugar cane areas in the Philippines have declined over the years in favor of corn, bananas, and other crops.

“Some farmers and millers have expressed concern at the potential for trade reform in the sugar industry, which may also limit additional planting” the USDA said.

It added that the 390,000 hectares planted to sugarcane in the current crop year is lower than the usual 400,000 planted annually.

With the lower production forecast for the next crop year, the USDA said it expects sugar imports to increase by more than 50 percent in the next crop year to 275,000 MT from 175,000 MT.

In February, the SRA issued sugar order no. 3, which allowed the importation of 200,000 MT of refined sugar.

The USDA said it sees sugar stocks for the next crop year to be seven percent lower than the previous year due to lower production and more quedans released to take advantage of higher prices.

“The onset of COVID-19 had resulted in higher stocks of refined sugar in  market year 2020 due to lower demand, while raw sugar was lower as quedan holders released their stocks to avail of rising prices,” the USDA said.