PHL sugar output in current crop year beats forecasts

June 29, 2020
Jasper Y. Arcalas (Business Mirror) |

After a two-year slump, the country’s sugar production in the current crop year is poised for recovery, latest data from the Sugar Regulatory Administration showed.

Preliminary SRA data as of June 7 has reached 2.123 MMT, 2.69 percent over the 2.067 MMT recorded in the same period of last year.

The volume was equivalent to 42.466 million 50-kilogram bags of raw sugar (LKg), compared to the 41.355 million LKg produced last year, SRA data showed.

The current crop year began on September 1, 2019, and will end on August 31.

The latest production data has already exceeded earlier full crop year forecasts made by the SRA and the United States Department of Agriculture Foreign Agricultural Service in Manila (USDA-FAS Manila).

Preliminary SRA projections and the USDA-FAS Manila’s Global Agricultural Information Network (Gain) report estimated that sugar output in the current crop year would fall to a 10-year low of 2.025 MMT due to erratic weather conditions and shrinking sugarcane area.

The current crop year sugar production is now the highest since the 2.083 MMT  in crop year 2017-2018, a year after the Philippines posted a record-high sugar output of 2.5 MMT.

Philippine Sugar Millers Association Executive Director Cocoy Barrera said raw sugar production was able to exceed forecasts, as higher sugarcane tonnage was able to offset the decline in sugar content per cane.

“We exceeded the production last year. I think this due to good weather during harvest, which resulted in higher tonnage although sugar recovery rate is down,” Barrera told the BusinessMirror.

“And although initially SRA said there is a decline in the sugarcane area this year, their latest figures show that there’s a slight increase in hectarage.”

SRA data showed that as of June 7 total sugarcane milled rose 6.21 percent to 23.046 MMT, from 21.7 MMT recorded in the same period last  year.

Sugar milling recovery rate, however, fell 3.14 percent to 1.85 LKg per MT of sugarcane (LKg/TC) to 1.85 from last year’s 1.91 LKg/TC, SRA data showed.

Industry sources attributed the decline in sugar content to rainfall during the maturing stage of the crop and this was worsened by the delay in the milling season.

Barrera said the country might ship at least 100,000 MT of raw sugar to the United States in the current fiscal year 2019-2020.

“As of June 14, we have shipped at least 66,700 MT in two vessels to the US. There’s a third vessel that is due to arrive in the Philippines around the second or third week of July.”

“It will ship another 30,000 MT of raw sugar. So we might ship a total of around 100,000 MT.”

Barrera noted that the volume of exports to the United States is below the country’s quota of 136,201 MT quota. He said, however, that traders are now looking for a way to find a vessel that will ship at least 20,000 MT.

“Traders are looking for a vessel that can carry 20,000 MT since we cannot fill a 30,000 MT capacity vessel.”

Barrera said the country is currently “swimming” in sugar stocks as demand plunged following the shutdown of the food service industry due to movement restrictions imposed by the government to contain the spread of Covid-19.

Domestic raw sugar demand as of June 7 fell by 1.43 percent to 1.539 MMT, from last year’s 1.561 MMT, SRA data showed. Demand for refined sugar also fell by 2.49 percent to 547,483.9 MT from 561,486.4 MT.

Refined sugar output as of June 7 fell slightly to 782,744.25 MT, from 784,606.80 MT recorded last year, SRA data showed.