Philippines to import 240k MT of refined sugar

MANILA, Philippines — The Philippines may see lower raw sugar production this crop year, necessitating the importation of 240,000 metric tons (MT) of refined sugar to fill in the supply gap and to help maintain stable retail prices of the sweetener, according to the United States Department of Agriculture (USDA).

In its sugar semi-annual report, the USDA-Foreign Agricultural Service (FAS) has lowered its raw sugar production forecast by 100,000 MT to 1.8 million MT this crop year beginning September.

The projection is below the Sugar Regulatory Administration’s (SRA) forecast of 1.85 million MT.

Declining sugarcane planting areas and the impact of weather disturbances including the El Niño phenomenon were the main factors for the lower forecast.

“The reduction was attributed to the closure of one sugar mill, Central Azucarera Don Pedro (CADP) in Batangas (Luzon), due to financial challenges. In addition, the Philippine Atmospheric, Geophysical and Astronomical Services (PAGASA) projected El Niño to persist from November to January, which is normally within the dry season in Negros (a major producing island),” the USDA-FAS said.

Following the loss of areas in Batangas, the agency estimates sugarcane area at 385,000 hectares (ha), slightly below the USDA official estimate of 390,000 hectares.

“Despite the loss of area in Luzon, expansion in sugarcane areas in Mindanao will partly compensate for the sugarcane farms covered by CADP, about 10,500 hectares,” it said.

Meanwhile, the El Niño phenomenon increases the likelihood of below-normal rainfall and reduced yields.

“SRA considers a production drop of at least 10 to 15 percent, depending on the severity of El Niño,” the US agency said.

With lower production and demand at 2.2 million MT, the USDA-FAS forecasts refined sugar imports to reach 240,000 MT to stabilize consumer prices and provide two months of buffer stocks.

This projection includes the 150,000 MT refined imports approved by President Marcos.

Required to be in the country by Sept. 15, this import program was intended to ensure sufficient actual supply for domestic consumption and provide a two-month buffer stock.

In terms of prices, the USDA-FAS expects millsite prices may not reach the high levels experienced in the previous year amid the huge stock balance of sugar available.

“At the end of the milling season, however, millsite prices remain high, averaging P3,000 per 50-kilogram bag (LKG) in July. Prices normally increase toward the end of the milling season (from June to August) as sugarcane supply becomes low,” it said.

Such price levels will continue to encourage farmers to plant sugarcane instead of shifting to other crops like corn, cassava, and banana, the US agency said.

Retail prices, on the other hand, stabilized since January but have not gone down to 2021 prices. At one point, refined sugar reached a high of P106 per kilo.

The government tried to resolve the sky-high price issue through importation under SO6 and SO7.

“To date, the SO6 and SO7 have failed to address the high retail prices affecting consumers and food manufacturers,” the USDA-FAS said.

Based on the monitoring of the Department of Agriculture as of yesterday, the retail price of refined sugar was at P84-110per kilo, washed sugar at P80-95 a kilo, and raw sugar at P75-95 per kilo.