Sugar prices to remain stable

MANILA, Philippines – The price of sugar will not go up in the coming months as the country’s supply level is enough to meet the demand.

In an interview, Central Azucarera Don Pedro Inc. (CADP) executive chair Pedro Roxas said that sugar prices will remain steady until June. “We don’t expect any shortage. The supply is enough at the moment.”

As such, he said they do not expect any spikes in the price of sugar.

This is in spite of the expected drop in the production of sugar this year. According to Roxas, the amount of sugar being produced in the country will go down by 10 percent.

The industry produced 2.4 million tons of sugar last year. The expected production this year will only be 2.2 million tons, Roxas said.  “The production is below original targets.”

Local sugar demand is 1.95 million to two million tons annually.

With regards to exports, Roxas said it has been good. “They haven’t dropped,” he noted.

The industry is exporting 12 percent of the country’s total sugar production. Of this, seven percent to eight percent is being sold in the US market while the balance is distributed to other nations.

The United States Congress is expected to decide on whether it will raise the allocation for sugar under the tariff-rate quota (TRQ) this year. Under the 2008 Farm Bill, barring an emergency shortage, the US  Department of Agriculture (USDA) can increase sugar imports beyond the 1.3 million tons the US has committed to import by April 1, 2009.

Under the TRQ scheme, the Philippines is allocated around 137,000 tons of “A” sugar every year. Manila accounts for 13 percent of the total volume assigned by the US for raw sugar imports for 2009.