‘High fertilizer prices to cut PHL sugar output’

April 20, 2022
Business Mirror | https://bit.ly/3kf8enj

The Philippines’s sugar raw production in marketing (MY) 2023 is expected to decline by 50,000 metric tons (MT) to 2 million MT (MMT) due to low productivity and rising fertilizer prices, according to a Global Agricultural Information Network (Gain) report.

According to an April 18 Gain report prepared by the US Department of Agriculture-Foreign Agricultural Service in Manila, the MY 2023 consumption is forecast to stay flat at 2.3 MMT. Imports are expected to help ensure sufficient sugar supply.

“The demand for sugar by industrial users is expected to grow as a result of the loosening of Covid-19 restrictions but remains constrained by high prices following lower domestic production and absent an increase in imports to stabilize prices,” the report read.

The Gain report noted that half of the country’s sugar demand comes from industrial users, such as beverage and processed food manufacturers, hotels, bakeries and restaurants.

It said the area planted in MY 2023 is expected to remain flat at 390,000 hectares, with low productivity and high input costs constraining growth.

The post also projected that the Philippines will not export sugar in MY 2023 and that it will not participate in the US sugar quota scheme.

“The United States is the sole export market for Philippine raw sugar, but SRA has not approved any MY 2022 sugar exports, per SO [Sugar Order] No. 1. Considering MY 2023 production is forecast to decline to 2 million MT, Post also expects no exports in MY 2023,” it said.

The post expects the Philippines to import 275,000 MT in MY 2023, up from the previous year’s 175,000 MT. This, it said, will supplement lower production.

The SRA released SO No. 3 last February 4 which authorized the importation of 200,000 MT of refined sugar to plug the gap in domestic output.

However, farmers appealed to local officials and to the Department of Agriculture and Sugar Regulatory Administration to stop importing during the harvest season.

The Regional Trial Court of Negros Occidental issued a temporary restraining order against SO 3.

Meanwhile, the post lowered the Philippines’s sugar production forecast for MY 2022 as it took into the account the damage caused by Typhoon Odette.

Output in MY 2022 was revised downward to 2.05 MMT as Odette destroyed sugarcane crops worth P1.2 billion.

The report noted that Odette’s impact on sugar farms prompted the Philippines to allocate 100 percent of its production to the domestic market in MY 2022.

Earlier, the SRA said it will issue a fourth SO that revises the production estimate for MY 2022 to 1.982 million MT.

According to the report, sugarcane areas in the Philippines declined over the years as farmers shifted to corn, bananas, and other crops.

The report noted that farmers and millers have expressed concern over the potential for trade reform in the sugar industry, which may also limit additional planting.

In MY 2022, the 390,000 hectares planted with sugarcane is smaller than the usual 400,000 hectares planted annually. Of that total, the post said sugarcane for ethanol production is only allocated 4 percent.