Sugar harvest hits record high 2.338 million MT

Sugar harvest for cropyear (CY) 2003-2004 hit a record high of 2.338 million metric tons (MT), a shade above the target of 2.3 million MT.

Data from the Sugar Regulatory Administration (SRA) show that as of Aug. 22 this year, sugar production was at 2,338,574 MT or 38,574 MT more than the 2.3 million projected yield for CY 2003-2004. The sugar cropping season starts in September and ends in August of the following year.

The actual sugar production could still be higher because the milling season has not yet ended, according to sugar industry observers. At 2.338 million MT, local sugar output is way above the projected national consumption of only 2.06 million MT, fueling apprehensions by local sugar producers and millers of another price fallout if the country fails to dispose surplus production.

SRA Administrator James Ledesma attributed the increased production to favorable weather and the use of better and higher-yielding varieties. He said domestic sugar prices are now ranging P750 - P780 per 50-kilo bag, 6.25 percent to 12 percent lower than last year’s P800 to P850 per 50-kilo bag.

"We are hoping that prices will still improve although it will be difficult even if we unload a portion of the excess sugar to the export market," said Ledesma.

Philippine Sugar Millers Association (PSMA) executive director Jose Ma. Zabaleta said the ex-farm prices are fair but on the low side.

"Considering the value of the peso which has been deteriorating against the dollar, considering that our production costs have gone up substantially because of the soaring fuel prices, sugar producers and millers won’t be making comfortable margins," said Zabaleta.

The bulk of production came from Negros Occidental, the country’s biggest sugar-producing region with a harvest of 1,274,580 MT; followed by Mindanao – 469,325 MT; Luzon – 369,331 MT; Panay province – 132,746 MT and Eastern Visayas – 92,592 MT.

To prevent local sugar prices from slipping as a result of excess supply, sugar producers and traders are exerting efforts to export about 232,000 MT of sugar to the world market this year, including Japan.

Ledesma said that local sugar traders will be shipping out 75,000 MT of sugar to the world market this October.

Of the 232,000 MT of sugar that needs to be exported, 142,000 MT will go to the United States which granted the annual export quota allocation to the Philippines.

The export volume given to the Philippines for 2005 is slightly higher than this year’s allocation of 137,352 MT and is the third highest allocation by Washington as part of its commitment to support developing sugar-countries.

Sugar industry officials said producers and traders will have to work harder to find new markets for the excess production because another bailout by the government will be difficult as the latter is struggling to rein in its bloated budget deficit.