The country’s raw-sugar output in crop year (CY) 2017-2018 could reach 2.3 million metric tons (MMT), 8 percent lower than the 2.5 MMT recorded in the previous CY, according to the Philippine Sugar Millers Association (PSMA).
PSMA Executive Director Francisco D. Varua told the BusinessMirror that unfavorable weather conditions affected sugarcane plantations in some provinces, resulting in lower sugar content and milling recovery.
“First, [the projected decline in output] is because of the weather. Rainfall affected plantations in the early parts of the cropping season. Also, some farmers reduced inputs as a result of lower sugar prices,” Varua said in a
recent interview.
PSMA’s output estimate is 130,000 MT higher than the 2.27 MMT projected by the Sugar Regulatory Administration (SRA) for the current CY, which will end on August 31.
Data from the SRA showed that as of January 21, the country’s sugar production has reached 800,191 MT, 2.64-percent lower than the 821,854 MT recorded in the same period last year.
Due to the expected decline in total sugar output in the current (CY), the SRA has 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 SRA also increased the sugar allocation for the domestic market to 93 percent, from 80 percent. 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,” Sugar Order (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.
Varua also said he doesn’t see Manila receiving an additional sugar import quota from Washington in the current fiscal yea, as Mexico is expected to fill up the expected sugar shortage of the United States.
“We do not expect additional quota from the US, that is why we reduced the ‘A’ allocation from 10 percent to 6 percent,” he said.
“Mexico has been able to reengineer their situation to allow them to ship raw sugar of acceptable quality to US refineries and the same time allow them to ship in bulk,” Varua added.
The Philippines was given a sugar imports quota of 142,160 metric tons raw value under Washington’s tariff-rate quota (TRQ) allocation in fiscal year 2018, which ends on September 30.
Countries authorized by the United States to export sugar under the TRQ scheme may do so at lower duties.
The TRQ is the minimum amount to which the US is committed under the World Trade Organization agreement.
The SRA, through SO 1-A, recently slashed its output forecast in the current crop year due to “unfavorable weather conditions.”
The attached government-owned and -controlled corporation of the Department of Agriculture earlier projected that the country’s raw-sugar output to reach 2.38 MMT as indicated in SO 1.
The SRA also projected that total sugarcanes milled in the current crop year would reach 25.471 MMT, 9.19 percent lower than the 28.051 MMT recorded volume in CY 2016-2017.