Sugar millers open to allocating entire output for domestic use

MANILA, Philippines — Sugar millers are warm to the possibility of allocating the entire sugar production in the next crop year for domestic consumption considering the ill effects of El Niño on sugarcane yield.

“Regarding the 100 percent Quedan B domestic allocation for the upcoming season, this may be justified considering the prolonged effects of the El Niño phenomenon,” the Philippine Sugar Millers Association (PSMA) said in a statement yesterday.

“The full impact of this weather event on the next crop season is still being evaluated by the Sugar Regulatory Administration (SRA), as it reviews its pre-milling estimates for Crop Year 2024-2025,” the PSMA added.

SRA administrator and CEO Pablo Luis Azcona earlier hinted that the SRA board is inclined to allocate again all sugar output in crop year 2024-2025, which begins on Sept. 1, for domestic consumption as foreseen production would be insufficient to meet overall demand.

The SRA board, through the issuance of the first order in each crop year, determines how the local raw sugar production would be allocated and sold. They usually do this based on a supply and demand analysis.

The SRA board can classify raw sugar for the following purposes: A for export to the US market, B for domestic consumption, C for reserved sugar and D for export to the world market.

In the past two crop years, the SRA board classified all sugar output as “B” to ensure local stocks amid foreseen lackluster production.

The PSMA said it would coordinate with the government should local sugar yield be better than initially projected to facilitate export to the US market, such as what is happening in the current crop year.

Local raw sugar production in the current crop year 2023-2024 has exceeded the government’s projections, allowing the country to resume exporting to the US market to flush out some stocks to stabilize domestic farmgate prices of the commodity.

The group also disclosed that it would encourage sugar mills to consider the two-week delay in the start of milling season that is being proposed by certain quarters of the industry, particularly sugarcane planters.

“PSMA acknowledges the potential benefits of delaying milling to allow for better cane maturity and possibly higher yields, particularly in light of El Niño,” it said.

“While the association does not have the authority to change the start date, it will encourage mills to consider the delay,” it added.