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USDA sees flat PHL sugar output amid threat of import liberalization

usda sees flat phl sugar output amid threat of import liberalization 816x445 - USDA sees flat PHL sugar output amid threat of import liberalization
sugar cubes 042619 - USDA sees flat PHL sugar output amid threat of import liberalization

RAW sugar production in the Philippines during market year (MY) 2019-2020 is expected to be little changed with the current dry spell expected to affect the next crop year and planting intentions expected to be dampened by the possibility of liberalized sugar imports, the United States Department of Agriculture (USDA) said.

According to the USDA’s Global Agricultural Information Network (GAIN) report for the Philippines, raw sugar output during MY 2018-2019 was 2.1 million metric tons (MMT), less than the official projection of 2.225 MMT, due to unfavorable weather in sugarcane-producing provinces, as well as the decrease in the land planted to sugarcane.

“Although the milling season for crop year (CY) 2018-2019 may end somewhat earlier than expected due to a lack of cane, industry contacts believe that the Philippines will still hit its lower production estimate of 2.08 MMT. Weather conditions, in particular the amount and timing of rainfall, strongly affect sugarcane output since about 80% of all sugarcane fields are rain-fed and have no irrigation,” GAIN said in the report.

Land area planted to sugarcane in MY 2018-2019 fell to 415,000 hectares from 418,000 hectares a year earlier.

The Visayas account for 73% of domestic sugar production at 73%, with Negros Island producing 64%, GAIN said. Mindanao accounts for 17% and Luzon 10%.

“Roughly 90% of total Philippine production comes from four sugar planter federations and three miller associations. There are 27 sugar mills and 8 sugar refiners in the country. There are 7 mills in Luzon, 12 in Negros Island, 3 in Panay, 2 in Eastern Visayas, and 4 in Mindanao,” it noted.

According to the Sugar Regulatory Administration (SRA), there are about 65,000 sugarcane farmers in the Philippines.

Demand for sugar is also expected to remain little changed in the current MY 2018-2019 at 2.25 MMT due to a slowdown in the soft drink market due to higher taxes on sugar-sweetened beverages and the growing health consciousness.

The inventory of raw and refined sugar in MY 2018/19 “increased due to growing refined sugar imports and a slowdown in withdrawals of domestic sugar from the mills. Increased inventories are also attributed to greater yields due to improved cane purity, GAIN said.

According to the SRA, mills are reporting that their warehouses are full and that most are looking for additional storage space and re-purposing other buildings to hold the unsold sugar. — Vincent Mariel P. Galang

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