MANILA, Philippines?Philippine sugar production is already way above the initial target for 2011, building up local stocks and readying the industry for any additional demand from the premium US market.

Sugar output is expected to reach 2.2 million metric tons by August, the end of the current crop year, according to Philippine Sugar Millers Association Inc. executive director Archimedes B. Amarra.

He said millers have produced 2.1 million tons of sugar as of May 1, (from Sept. 1 last year) and production would continue until around July.

Millers may continue production until around July. If output reaches 2.2 million tons by August, it will have been 12.24 percent higher than the initial target of 1.96 million tons. The conservative target of 1.96 million tons was made late last year, when an extended drought had sowed fears of low sugarcane harvests.

At the same time, sugar withdrawals from mills, which indicate local demand, are still down.

Analysts said consumer spending has been sluggish in various categories, including food and beverages, due to price increases on finished goods and fears of unemployment due to the turmoil abroad. There were particular concerns on the prospects of overseas Filipino workers in the Middle East and North Africa, where political unrest has been raging since end-December.

According to information from the Sugar Regulatory Administration, withdrawals as of May this year were down 25 percent for raw sugar and 41 percent for refined sugar compared with May 2010.

Stocks are thus building up, with raw sugar up 80 percent and refined sugar up 14 percent as of this month from a year ago.