Sugar output rises 131.89 percent but demand remains ‘anemic’

October 21, 2020
Jasper Y. Arcalas (Business Mirror) |

Local sugar production is off to an excellent start as favorable weather conditions allowed planters to harvest more canes resulting in more than doubling of yield in the first month of the crop year 2020-2021.

Latest Sugar Regulatory Administration (SRA) data showed that raw sugar output as of October 4 expanded by 131.89 percent to 41,248 metric tons from 17,788 MT recorded in the same period of last year.

SRA data also showed that total sugarcane milled during the reference period more than doubled to 571,842 MT from 250,650 MT.

Sugar yield was estimated at 1.59 50-kilogram bags per MT of sugarcane versus last year’s 1.56 LKg/TC, based on SRA data.

Government officials and industry players attributed the increase to better planting conditions that allowed planters to harvest more crops.

“It’s the hard work of the sugar planters plus good weather. Hopefully the moderate La Niña will not affect the productivity of sugar,” Agriculture Secretary William D. Dar told the BusinessMirror via SMS.

SRA Board Member Emilio Bernardino L. Yulo, who represents the planters’ sector, said the initial production has a “very strong” start coupled by stable prices that is favorable to both producers and consumers.

Yulo, however, cautioned that it is too early to tell if the trend will continue with the threat of La Niña and an uncertain market situation.

Yulo noted that total market demand remains lackluster as consumption from traditional markets like restaurants remain anemic amid the Covid-19 pandemic.

Nonetheless, Yulo said they remain optimistic that the upcoming Yuletide season ­beginning December 1—would drive sugar demand as Filipinos crave for bibingka, kakanin and other Christmas-related foods.

For his part, SRA board member Roland B. Beltran, who represents the millers’ sector, said they observed demand is slowly increasing as the economy further opens up.

Raw sugar demand as of October 4 rose by 64.11 percent to 119,644 MT from last year’s 72,918 MT, while demand for refined sugar grew 36.58 percent to 91,374.65 MT, SRA data showed.

Beltran added that the initial price reactions showed that sugar policy for the current crop year is on track.

The SRA allocated 93 percent of the total raw sugar output this crop year, which started last September 1 and ends on August 31 next year, for the domestic market, while the remaining 7 percent for export to the US market.

The country’s raw sugar production in the current crop year may increase by 2.3 percent to 2.2 million metric tons (MMT) but a La Niña could dent output, according to a Global Agricultural Information Network (GAIN) report.

The GAIN report, prepared by the US Department of Agriculture-Foreign Agricultural Service in Manila, projected that local sugar production would increase for two consecutive MYs.

However, the Philippine Atmospheric, Geophysical and Astronomical Services Administration’s (Pagasa) recent warning of a likely La Niña “could moderately lower the production outlook,” according to the report.

“Raw sugar production in MY 2020/21 could be affected by a likely La Niña weather pattern, as the local weather bureau Pagasa issued an alert for Visayas and Mindanao during the last quarter of 2020. If realized, the likely impact would be a moderate decline in production,” it said.

The report said the sugarcane area in the current MY is expected to stay flat at 401,000 hectares as planters continue to face labor shortages and remain cautious about the possible liberalization of the industry.

It added that total sugar consumption in the current MY could “recover slightly” to 2.3 MMT as the economy “opens up and more institutional users increase capacity” and demand for sugar-sweetened food and beverages improves.