Philippines to import 200K MT of raw, refined sugar

MANILA, Philippines — The Philippines is projected to import additional 200,000 metric tons (MT) of refined and raw sugar to raise buffer stocks due to low production in the past crop year, the United States Department of Agriculture (USDA) said.

The agency said this includes 125,000 MT of refined sugar and 75,000 MT of raw sugar.

This is in contrast to the earlier commitment of the Sugar Regulatory Administration (SRA) of no importation as local production should be able to meet demand.

In the latest sugar semi-annual report by its Foreign Agricultural Service (FAS), the USDA said its forecasted raw sugar importation of 75,000 MT would augment the low buffer stocks as a result of low sugar output and carryover in the market year (MY) or crop year, which ended in August.

The comfortable monthly buffer stock is set by the SRA at 160,000 MT.

“It is critical, though, to replenish the buffer stocks to a comfortable level of 160,000 MT. While the new administration sets importation as the last priority, there has to be some importation of raw sugar to augment buffer stocks and support refineries in supplementing the low raw supply during the early part of the milling season,” the USDA said.

“One of the lessons learned from MY 2022 is that importation of raw sugar is needed given low end-of-MY stocks in order to stabilize sugar prices,” it said.

Based on data from the SRA, the country only had 125,572 MT of buffer stock as of end-August.

The rejected SO4 entailing the importation of 150,000 MT raw sugar was supposed to boost raw sugar stocks at the beginning of the current crop year, which started last month.

“Historically, November is the starting month wherein monthly raw production can supply monthly demand. Depending on prevailing prices, traders will try to replenish their stocks, which would result in high withdrawals at the beginning of MY 2023 and comfortable buffer stocks will not be achieved until October 2022,” the USDA said.

Meanwhile, the US agency said the country is still anticipated to import 125,000 MT raw equivalent, or 107,000 MT refined sugar, in the current crop year.

This is on top of the 150,000 MT cleared for importation under Sugar Order No. 2 (SO2), which are expected to come in by Nov. 15.

“MY 2023 requires additional importation of refined sugar particularly industrial sugar to achieve comfortable end-of-MY stocks. Proper timing of importation is crucial in stabilizing sugar prices,” it said.

In the previous crop year, the country brought in 228,052 MT of refined sugar through the SO3 import program, which raised buffer stocks back to a comfortable level.

This, however, was not enough to pull down elevated retail prices of sugar, which reached a high of P129 per kilo in markets.

The USDA has lowered its sugar production estimate for the current crop year to 1.85 million MT from its initial projection of two million MT due to weather disturbances and low fertilizer application due to soaring fertilizer prices.

This aligns with the SRA forecast of 1.876 million MT as noted in SO1.