Sugar production to hit 10-year low

MANILA, Philippines — Local sugar output is seen hitting its 10-year low and will further decline in the next crop year, prompting more imports of the commodity amid increasing demand.

In the latest report of the US Department of Agriculture- Foreign Agricultural Service, local sugar production will likely reach 2.025 million MT, down 3.5 percent from the  previous crop year.

A sugar crop year starts in September and will end in August the following year.

USDA said the decline is mostly due to erratic weather conditions in sugarcane-producing areas and the contraction in planting areas as also reported by the Sugar Regulatory Administration.

“Unfavorable weather conditions contributed to the heavier cane with lower sugar content as well as continued labor shortage problems in sugarcane areas,” USDA said.

Areas dropped to 406,500 hectares from 410,000 hectares.

Production will further go down to as low as two million MT by the next crop year as sugarcane areas continue shrinking from the conversion of sugarcane lands, particularly in Luzon.

“Sugar producers also remain cautious about the impact of possible deregulation as Philippine economic managers consider further trade liberalization beyond rice, such as sugar and corn sectors,” USDA said.

The Department of Finance earlier mentioned that sugar reform is necessary to increase the competitiveness of Philippine food processing versus its ASEAN neighbors.

The study, which will determine if liberalization is a go or no, being conducted by the National Economic and Development Authority has yet to be completed.

Further, the lower production will likely prompt more imports next crop year to cover increasing demand.

USDA said imports may reach 450,000 MT next crop year from the 400,000 MT expected this year. However, four months left into the current crop year, the SRA has not issued any importation program.

Sugar demand is expected to increase marginally to 2.35 million MT next year from this year’s 2.3 million MT.