PH poised to boost sugar output amid high prices

INQUIRER PHOTO / GRIG C. MONTEGRANDE

Local sugar production next crop year is expected to increase as farmers planted more to profit off steep prices of the sweetener.

In a report, the US Department of Agriculture (USDA) pegged local sugar production at 1.9 million metric tons (MT) for crop year 2024, which will begin in September and end in August next year.

“Higher prices encouraged more farmers to plant sugarcane and better fertilization is expected to result in higher production,” said the foreign agency.

But for the current year ending August, the USDA reduced its projected local output by 20,000 MT to 1.83 million MT, in line with the Sugar Regulatory Administration’s (SRA) latest estimate, citing the adverse impact of weather disturbances and low fertilization that will cut the yield of sugarcane producers.

Resumption of exports

But despite the higher output next year, the USDA still expects the Philippines to import some 250,000 MT of refined sugar “to stabilize consumer prices and provide two months of buffer stocks.” It does not, however, expect the government to allow raw sugar imports between September this year and August 2024 to protect local producers.

The USDA also expects the Philippines to resume exports in marketing year 2024, or three years after devoting the entire local production to the domestic market to arrest the rapid escalation in sugar prices.

Export quota

It estimates that the Philippines may ship out a total of 60,000 MT of sugar to the United States as part of its export quota.

The United States has an agreement with the World Trade Organization to import a certain volume of sugar from sugar-producing countries including the Philippines at lower tariffs.

Meanwhile, the Marcos administration has so far approved the importation of 440,000 MT of refined sugar, as contained in the controversial Sugar Order No. 6 issued in February.

This had stirred controversy and even prompted a Senate inquiry as only three importers were chosen to bring in the refined sugar, plus the official order had been issued only after the stocks had already arrived.

Before this, the government had authorized the importation of 150,000 MT of refined sugar in September last year.

Both import orders, however, had failed to significantly bring down local retail prices of sugar.

As of last Friday, refined sugar is priced from P86 to P110 per kilogram from only P70 per kg a year ago, based on the Department of Agriculture’s price monitoring.INQ