February 2, 2025
https://www.philstar.com/business/2025/02/02/2418479/unnecessary-delay
Last November, our government announced that it is delaying any further sugar importation plans until mid-2025, as agreed upon in a meeting between Agriculture Secretary Francisco Tiu Laurel Jr. and Sugar Regulatory Administration (SRA) administrator Pablo Luis Azcona.
This move, it said, aims to shield domestic producers since both raw and refined sugar stocks are said to be sufficient to cover projected demand and that the delay will allow for a clearer view of the domestic supply after this harvest season, which has been affected by El Niño, lowering sugar yields and delaying the harvest.
The SRA earlier said that Philippine raw sugar production for crop year 2024-2025 is projected to drop by 7.29 percent to 1.78 million metric tons, the lowest in 25 years due to the adverse effects of extreme weather conditions.
Because local sugar production has been on a decline, at best stagnant, in the past so many years, it has not been able to meet demand, which on the other hand has been on the rise.
Market analyst Knowledge Sourcing Intelligence recently observed that the Philippines has a rapidly growing food & beverage (F&B) industry and one of the biggest contributors to the nation’s economy, making up about half of its manufacturing sector.
It noted that the overall food and beverages market expansion will increase the demand for sugar in the sector and that the rapid proliferation of chain restaurants and meal delivery services adds to this need, as consumers seek different culinary experiences that frequently include sweetened beverages and sweets.
The report also mentioned that the online segment of the Philippine sugar market is expected to grow significantly owing to several factors, such as evolving consumer behaviors coupled with its technological advancements and the evolving landscape of e-commerce.
It explained that online shopping being convenient, consumers can now access a large array of sugar products from different companies without visiting physical stores. “All such platforms offer in-depth product descriptions, customer reviews, and competitive pricing, enabling consumers to make well-informed decisions. E-commerce platforms are particularly helpful for specialty sugars like muscovado, as most supermarkets will not carry them. They are essential to consumers who want something unique and producers who seek to reach more people. In this regard, according to the International Trade Administration, in 2021, the e-commerce market sales of the Philippines were $17 billion, which, by 2025, will witness an increase of 17 percent, reaching $24 billion,” it said.
It added that the move toward health-conscious eating has resulted in a growing market for organic and natural sugar alternatives, compelling traditional sugar producers to improve their product offerings. This trend not only appeals to health-conscious customers but also creates new opportunities for growth in the sugar business, the report said.
This rise in health consciousness among Filipino consumers, it said, has brought about a change in the way they purchase. “Natural and unrefined sugars are the new favorites as consumers opt for healthier alternative sources of sugar to avoid processed sugars. Online retailers are filling this niche market by carrying specialty products where taste, quality, and health benefits take over where once price alone used to determine. The trend towards healthier eating has caused a growth in premium sugars online sales while local artisans and small-scale producers use social media websites and online marketplaces to sell their products directly to consumers,” according to the report.
Knowledge Sourcing Intelligence expects that in the next phase of e-commerce evolution in the Philippines, there will be a continued surge of more sugar producers going digital to increase their market visibility and reach. Such change, it said, does not only help small-scale farmers and local brands compete with big corporations but also fosters a more diversified marketplace for unique sugar products from consumers.
The report expects the Philippine sugar market to grow at a compound annual growth of 3.97 percent from $4.103 billion in 2025 to $4.984 billion in 2030.
But then again, any growth, which the market for Philippine sugar will depend to a large extent on the availability of sugar for the food and beverage sector and for other local consumers.
A report by Statista showed that in the 2022/23 marketing year alone, the Philippines imported about 730,400 metric tons of refined sugar, which is more than 200 percent higher than in the previous year to meet the domestic demand at a time of low production output. In 2023, total supply of raw sugar in the country amounted to 1.94 million metric tons, a decrease from the previous year, while consumption totalled 2.2 million tons of sugar that year.
While the government already expects production to significantly drop during the current crop year, it nevertheless maintains that the country still has ample stocks and retail prices have remained stable.
With the government deciding to defer any sugar importation plans until the middle of this year or after the May elections, consumers and businesses that heavily use sugar have become jittery since an increase in prices has become inevitable and planning ahead has become difficult if not impossible.
Remember when sugar prices reached as much as P120 per kilo just because imports were delayed and our government failed to act fast enough?
We don’t want to worsen inflation any further. It is best for our government to be proactive and to be prepared as any delay in sugar imports could lead to a supply shortage. Buying at short notice would naturally result in higher buying prices for the users and importers, which we do not want to happen.
It is crucial for the Department of Agriculture to immediately commence the importation of sugar and not wait until after the end of the crop season in mid-2025. Timely imports can help stabilize the market, preventing disruptions in businesses dependent on sugar and ensuring there is ample supply even during peak consumption periods.