The Philippine sugarcane & milling industry (part 2)

According to the Institute for Development and Econometric Analysis, Inc. (IDEA) latest Industry Trends, a regular publication produced by IDEA, while there are no metrics available to exactly measure demand for sugar, the country’s sugar authorities use sugar withdrawals as a proxy for sugar consumption.

Furthermore, it was reported that according to official data from the PSMA, refined sugar withdrawals closely follow the movement of refined sugar production levels. According to official data from the PSMA, sugar withdrawals spike up during October, December and the summer months (March, April and May), periods that historically depict an increase in food and beverage intake among the average consumers. In addition, refined sugar withdrawals closely follow the movement of refined sugar production levels for the past two decades. During the 2008-2009 milling season, however, demand for refined sugar surpassed supply by nearly 2 million Lkg; for two straight years before that, the country posted refined sugar surpluses averaging 1.4 million Lkg.

Likewise, per same published report, based on the data from the Philippine Sugar Millers Association (PSMA), Negros has remained far and away the country’s most prolific sugarcane producer. During the 2008- 2009 sugar milling season, the island’s 13 operating azucareras processed 12 million MT of raw sugarcane, with sugar miller and refiner Victorias Milling Co., Inc. posting the highest gross milled tonnage at 2.74 million MT. Following Victorias were the A. Chan Sugar Corporation-owned Binalbagan-Isabela Sugar Company (BISCOM) and the Roxas Holdings, Inc. (RHI)- controlled Central Azucarera de la Carlota, Inc., which posted gross milled sugarcane figures of 1.73 million MT and 1.58 million MT, respectively. Luzon had been the perennial number two as far as gross cane milled is concerned.

Much of the island’s sugarcane production has been concentrated in two areas, Batangas and Tarlac, where three of Luzon’s largest sugarcane millers and refiners are located, namely, Central Azucarera Don Pedro, Inc. (CADPI), Central Azucarera Tarlac (CAT) and Batangas Sugar Central, Inc. Pampanga had also been known as one of Luzon’s more prolific sugarcane producers, whose annual sugarcane production sometimes rivalled that of nearby Tarlac.

The province, however, experienced volatile sugarcane produce during the past few years. In 2005, sugar production in Pampanga hit a 13-year high at 721,171 MT; four years later, it amounted to 406,733 MT, down 19.3 percent from the previous year.

Lastly, Mindanao’s robust sugarcane production in the past four decades has been a surprise story for the industry. Despite anecdotal talk about Mindanao’s worrisome security situation and its impact on the island’s economic growth, its sugar industry has remained one of its brightest spots; indeed, it is the only region among the country’s five sugar-producing areas that tallied positive compounded annual growth rates (CAGRs) for gross cane milled in each of the decade where the PSMA has official data, according to IDEA.

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