THE Sugar Regulatory Administration (SRA) said it expects sugar output in the next crop year to recover and grow by nearly 6 percent to 2.225 million metric tons (MMT).
The SRA issued Sugar Order (SO) 1, which sets the sugar policy for crop year (CY) 2018-2019. SO 1 estimated that total sugar output in the next crop year would reach 2.225 million metric tons, higher than the 2.1 MMT produced in CY 2017-2018. “We [hope for] more favorable weather this cropping season,” SRA Administrator Hermenegildo R. Serafica told the BusinessMirror via SMS when asked about the agency’s estimate.
The decline in the country’s sugar output in CY 2017-2018 has been attributed to “unfavorable weather conditions,” particularly the increase in rainfall over some sugar-producing provinces. Rains affect the yield of sugarcane, as wet canes have lower sugar content.
At the start of CY 2017-2018, the SRA estimated that sugar production would reach 2.38 MMT. In January the SRA revised its forecast downward to 2.266 MMT due to bad weather.
“Weather, in fact, is unpredictable, but we are hopeful of a favorable weather condition for crop year 2018-2019,” SRA Sugar Board member Roland Beltran told the BusinessMirror.Serafica said favorable sugar prices would also encourage sugarcane farmers, to sustain planting and not shift to other crops during the crop year.
“Prices should be able to cover for production inputs to sustain the farm operations of farmers otherwise they will be forced to abandon sugarcane farming or move to other high-value crops,” he said.
Sugar industry stakeholders said a “reasonable” sugar price level that would be acceptable to both farmers and consumers would be P1,500 per 50-kilogram bag (LKg).
Prices of “B” sugar or those allocated for domestic market at the start of CY 2017-2018 averaged P1,350 per Lkg.
Philippine Sugar Millers Association Executive Director Francisco D. Varua said his groups’ output estimate for CY 2018-2019 concurs with the forecast of the SRA. “That is also more or less the estimate of the PSMA,” Varua told the BusinessMirror via SMS.
Beltran said Section 4 of SO 1 gives the SRA the flexibility to adjust the sugar allocation for CY 2018-2019 “considering the unpredictability of the weather or climate.
“We can make adjustments depending on the prevailing circumstances,” he said.
Section 4 of SO 1 indicates that the SRA “shall undertake periodic assessment” of sugar production and withdrawal.
“And on the basis of such assessment, the [SRA] may, from time to time, adjust the percentage distribution of the different classes of sugar as provided in this Sugar Order and/or take the necessary action to address the situation,” SO 1 read.
Under SO 1, the SRA allocated 95 percent of the total estimated sugar output in CY 2018-2019, or some 2.114 MMT, for the domestic market. The remaining 5 percent, or around 111,250 MT, would be shipped to the United States.
The SRA expects total area planted with sugarcane in CY 2018-2019 to reach 423,447.61 hectares, which would produce about 24.702 MMT of sugarcanes.