THE PHILIPPINES expects its sugar output to drop in the crop year that just started as dry weather adversely affected sugarcane farms.

Sugar industry stakeholders are bracing for a 5-percent drop in production to 1.87 million tons in the current crop year (September 2010 to August 2011) from 1.97 million tons in the crop year that just ended, newly appointed Sugar Regulatory Administrator Ma. Regina Bautista-Martin said.

The recent drought affected sugarcane plantations, Martin said at the sidelines of the turnover ceremony at the Sugar Regulatory Administration (SRA).

Bernardo Trebol, whom Martin replaced last month, said some new plantings were just starting to grow, hampered by lack of moisture.

Philippine Sugar Millers Association executive director Archimedes Amarra said said the 1.87 million tons output projection was still preliminary.

Despite the anticipated decline in production, the SRA has not made any plan on new sugar importation.

?The Philippines? sugar supply is okay for now,? Martin said.

One or two millers may start milling this week, she said. Milling is expected to peak around November. The global marketing year starts in October, and sugar supply is expected to ease toward the end of 2010.

In the meantime, the Philippines is set to complete 100,000 tons in imports in mid-September. This brings total Philippine sugar imports to 250,000 tons for 2010.

Sugar prices are expected to remain stable at the current suggested retail price (SRP) of P56 per kilo.

Martin said that about two weeks ago, the National Price Coordinating Council raised the SRP for sugar to P56 from P52 per kilo to reflect the tight sugar supply situation at the end of the 2009/2010 crop year.

But Martin said the SRA?s focus was already on 2015, when member-nations of the Association of Southeast Asian Nations scrap import tariffs on sugar.

She said the SRA was aiming at helping the industry improve efficiency, productivity and competitiveness ahead of trade liberalization.

The Philippines returned to the sugar-import market this year for the first time since 2001. The country?s private traders imported a combined 150,000 tons in the first half and ordered another 100,000 tons recently.

Sugar prices doubled last year and went up to a 23-year high of more than P2,300 per 50-kilogram bag early this year. This, as weather disruptions affected harvests in Brazil and India, the world?s biggest producers. Riza T. Olchondra