Sugar prices rising

MANILA, Philippines - A slight rise in the domestic mill site and wholesale prices of sugar continues despite sufficient supply because of strong demand and speculations of supply tightness at the end of cropping season in August.

Price monitoring data from the Sugar Regulatory Administration (SRA) showed that the average wholesale price of refined sugar in Metro Manila has been rising from P2,094 per 50-kilogram bag as of April 1 to P2,180 per 50-kilogram bag as of May 6.

Retail prices of refined sugar in Metro Manila, however, have remained stable at between P48 to P49 per kilogram since April.

The average mill site prices of raw sugar have also risen slightly from an average of P1,646 per 50-kilogram bag as of April 6 to P1,692 per 50-kilogram bag this month.

SRA administrator Ma. Regina Martin said yesterday the uptick in mill site and wholesale prices is driven by increased demand as the economy improves.

“Wholesale and mill site prices are still on the uptick although not sharply,” she said. “Retail prices are still stable. So we are monitoring mill site prices.”

Demand for sugar is now placed at around 2.2 million metric tons annually against 2.18 million MT last year.

Martin said the sugar industry has surpassed its production target of 2.35 million MT for the current crop year.

“There are also speculations of supply tightness nearing the end of the crop year in August,” she said.

“They are speculating that we will not have enough supply but we have enough.

“We have already exceeded our target for the year and have produced 2.37 million MT and we are confident of producing around 2.40 million MT. We still have some eight to 10 mills operating. So we have sufficient supply.”

To stabilize domestic sugar prices, the SRA is reviewing the reallocation anew of some 100,000 MT of sugar that remains unshipped to the world market.

The SRA might issue a sugar order next week for the fresh reallocation of world market to the domestic market, Martin said.

In February, the SRA reduced sugar exports to the world market to satisfy domestic demand and stabilize prices.

The world market sugar allocation was slashed to just two percent of the total production from crop year 2013 to 2014 from the previous six percent.

Domestic sugar allocation was increased to 96 percent from 92 percent.

Continued rise in sugar mill gate prices could encourage smuggling of cheaper foreign sugar.