High world market prices benefit RP sugar industry

CEBU, Philippines - The growing cost of sugar in the world market is seen to benefit the decade-old sugar industry in the Philippines, saving it from becoming a “sunset” industry and become a sustainable one.

Philippine Sugar Technologists Association (Philsutech) former president Ramon Durano VI said that the industry is showing signs of bullishness as demand for locally produced sugar have increased significantly.

“The Philippine sugar industry is still not a sunset industry, it continues to thrive. In fact, there is an increase in the consumption of our domestic sugar,” Durano said.

Durano, whose family-owned company Durano and Company manages hectares of sugar farm both in Cebu and Negros, said that the high cost of imported sugar varieties, due to the decrease in production of world production of sugar caused mainly by drastic climate change, has raised the demand for Philippine sugar.

But amid the demand, he explained that the country continues to import sugar not because of shortage but to maintain prices at an “acceptable level.”

According to Durano the decrease in production of world sugar has resulted to a jump of US$0.18 centavos per pound.

The current world price for sugar is at US$0.22 centavos per pound and is forecasted to grow up to US$0.40 centavos per pound by year-end.

“This will certainly redound to the benefit of local producers,” he said, adding that along with the growing demand for domestic sugar for consumption, new classifications of sugar have been introduced, including those for biofuel.

In effect, he said sugar planters have once again capitalized on their agricultural land properties in order to plant more sugarcane.

Local planters and producers continue to look for cost-effective ways to produce sugar with the use of technology, he added.

Durano likewise assured the implementation next year of the General Agreement on Tariff and Trade (GATT), which will lower the tariff on sugar importation, is not a threat to local players.

Under the GATT, the present tariff rates of Southeast Asian countries are to be changed in 2010 to give way to reduced duty rates for imported products that are categorized under the identified integration areas, including agro-based products.

“The country’s sugar industry has always been competitive, especially since the Philippine economy is now recovering from the effects of the global crisis,” Durano said.

Earlier, Alfonso A. Uy, chairman of the board and president of Philippine Foremost Milling Corporation, said the softening of the country’s economy in 2008 has led to a 20 percent drop in demand for the company’s sugar and flour produce.

Like Durano, Uy also voiced optimism the market for flour and sugar will start picking up next year, as sentiments of recovery has been floating around the country’s business sectors.