Sugar output seen improving

MANILA, Philippines — The country’s raw sugar production may slightly improve for the current crop year amid strong local demand, but would still fall short in filling in total national requirement, the United States Department of Agriculture (USDA) said.

In the latest report of the USDA Foreign Agricultural Service, the Philippines is seen producing 2.25 million metric tons of raw sugar this crop year, which started last month and will end in August 2019.

This is seven percent higher than the 2.1 million MT output in the previous crop year which experienced unfavorable weather conditions and decrease in production area.

“Consumption will remain flat as demand for sugar by industrial users (beverages and processed food manufacturers) remains strong due to import restrictions and increased taxes on sugar substitutes,” USDA said.

It added that consumption of cane sugar will remain strong despite high sugar prices and increased taxes on sugar sweetened beverages as soft drink manufacturers increase the usage of cane sugar and shift away from high fructose corn syrup use.

Sugar imports for the crop year is also seen reaching 300,000 MT to augment local sugar production, higher than the 200,000 MT sourced outside the country in the previous year.

“Raw sugar output may be even lower than what is officially projected by the Sugar Regulatory Administration due to continued farm labor shortages and possible unfavorable weather conditions contributing to the low sugar content of cane produced,” USDA said.

For the current crop year, quota to the US market has been set at 142,160 MT, or about five percent of the expected production.

Meanwhile, prices of sugar in the market showed no signs of declining despite improved production at the start of the milling season.

Latest data showed that retail price of refined sugar is now P64 per kilogram, up 21 percent from a year ago. The price of washed and raw sugar also rose to P59 and P55 per kilo, respectively, compared to the previous year’s P47 and P48.

The wholesale price of refined sugar is also nearing the P3,000-mark per 50-kg bag. It is now being sold at P2,700 from only P2,000 last year.

This is despite improved production of raw sugar which grew 51 percent to 4,763 MT at the start of the milling season three weeks ago.