Philippines seen to import 400K MT of sugar

MANILA, Philippines — The Philippines is seen importing as much as 400,000 metric tons of sugar for the current crop year as local production will not be able to cover increasing demand.

In the latest report of the US Department of Agriculture-Foreign Agricultural Service, the Philippines is expected to buy the same level of sugar it imported last crop year.

“Sugar imports are expected to be about 400,000 MT, the same as the previous year, to supplement local sugar production,” USDA said.

A sugar crop year starts in September and will end in August the following year. The Sugar Regulatory Administration has yet to approve a new round of importation.

During the last crop year, SRA approved two batches of importation, 150,000 MT in October 2018 just when the crop year started and another 250,000 MT as the crop year nears closing in August.

This as the country’s raw sugar production is expected to remain unchanged this crop year amid unfavourable weather conditions.

The Philippines is seen to produce 2.1 million MT of raw sugar, almost the same as the 2.072 million MT production the previous crop year.

“Industry sources believe, however, that raw sugar output may be lower than what the SRA projects. Factors affecting raw sugar production include unfavourable weather conditions resulting in heavier cane with a lower sugar content, reduced planting area, and a prolonged farm labor shortage in sugarcane producing areas,” USDA said.

USDA has revised its projection from the earlier 2.2 million MT production for the industry. The SRA already said the Philippines expects to produce 2.096 million MT of sugar.

“Consumption will increase slightly to 2.3 million MT as demand for domestic and imported sugar by industrial users rises due to import restrictions and increased taxes on beverages using sugar substitutes,” USDA said.

Domestic food processing and beverage sectors continue to expand while consumers adjust to the increased sugar taxes.

Almost all sugar produced in the Philippines is consumed locally where roughly 50 percent of domestic consumption is accounted for by industrial users, 32 percent by households, and the remaining 18 percent by institutions.

Sugarcane production is seen declining to 22 million MT as area is also expected to drop to 410,000 hectares from 415,000 hectares.