PHILIPPINE raw-sugar production in crop year (CY) 2017-2018 may be lower than 2.38 million metric tons (MMT) due to unfavorable weather conditions, the Sugar Regulatory Administration (SRA) said on Thursday.
In Sugar Order (SO) 1-A it issued on January 25, the SRA said it revised its initial forecast after undertaking an assessment of production and consumption trend. SO 1-A amended SO 1, which the SRA issued in August 2017.
“Due to unfavorable weather conditions, the total raw-sugar production for CY 2017-2018 is now estimated to be less than the initial projection of 2.38 MMT,” SO 1-A read.
The government-owned and -controlled corporation attached to the Department of Agriculture (DA) also amended the sugar allocation for CY 2017-2018.
The SRA reduced the allocation of sugar for the United States market (“A”) to 6 percent, from 10 percent. The allocation of world market sugar (“D”), or those for export to other countries, was also cut to 6 percent, from the previous 10 percent.
The Philippines exports some 136,000 metric tons (MT) of sugar to the US annually under the so-called tariff-rate quota scheme. The TRQ allows countries, such as the Philippines, to ship sugar to the United States at a relatively lower tariff.
The SRA also increased the sugar allocation for the domestic market to 93 percent, from the 80 percent indicated in the previous sugar order. The SRA pegged the domestic demand for sugar at 2.17 MMT.
“The domestic market remains as the priority market for locally produced sugar, and it is of national interest that a comfortable buffer, or carry-over volume, of ‘B’ sugar during the end of season and for the start of the next crop year for stable supply and prices,” SO 1-A read.
“This sugar order shall take effect immediately covering sugar production of week ending January 28 and subsequent week endings of CY 2017-2018,” it added.
The country’s raw-sugar production of 2.5 MMT in CY 2016-2017 is 11 percent higher than the previous crop year’s 2.238 MMT. The SRA attributed this to the expansion in areas planted with sugarcane.
Sugar millers earlier said sugar output in CY 2016-2017 was the highest since the 1970s.
Raw-sugar production as of December 17, according to SRA data, has reached 516,165 MT, 5.47 percent higher than the 489,407 MT recorded in the same period last year.
The latest data on sugar production for CY 2017-2018 showed that output in terms of 50-kilogram bags (LKg) have reached 10.323 million LKg, compared to the 9.788 million LKg recorded output a year ago.
Of the total sugar output recorded as of December 17, 81.72 percent was produced by Negros-based millers, amounting to 421,821 MT.
Executive Order 18 issued in May 1986 vests the SRA with the power to establish and maintain a balanced relationship between sugar production and the requirements of sugar to stabilize prices at levels “reasonably profitable to the producers and fair to consumers.”
Image credits: Bloomberg