Regulator forecasts better sugar production in 2023-2024

MANILA -Despite the cessation of operations in a major Batangas sugar mill, the Sugar Regulatory Administration (SRA) provided a rosy outlook for the industry, and expressing optimism that the El Niño phenomenon will actually enhance sugarcane production.

SRA Administrator Pablo Luis Azcona said local sugar output is projected to rise by at least 50,000 metric tons (MT) to reach about 1.8 million MT for crop year 2023-2024.

Azcona quantified the estimates are “very preliminary” based on the area planted and the average production in the previous year.

For crop year 2022-2023, sugar production stood at 1.799 million MT.

“If it’s (El Niño impact) not so severe, we might even see [an] increase as this is in time with the harvest season as the drier weather brings out more bags of sugar per ton of sugarcane,” Azcona said at the European Chamber of Commerce of the Philippines’ 2023 Sustainable Agriculture Forum.

“We have seen an increase despite the loss of area in Batangas because of the closure of a sugar mill,” Azcona said, referring to the Central Azucarera Don Pedro Inc. (Cadpi), a subsidiary of listed sugar and ethanol producer Roxas Holdings Inc.

In December last year, Cadpi permanently ceased operations in Nasugbu due to financial challenges it had experienced, particularly the plant’s age, an overcapacity in its mill equipment, coupled with the substantial decline in sugarcane supply.

If El Niño’s impact on the industry is severe, the SRA is anticipating a 10 to 15 percent decrease in output.

“Pagasa (Philippine Atmospheric, Geophysical and Astronomical Services Administration) projected El Niño to persist from November to January, which is normally dry season in Negros. If it’s severe, it will get to a point that it will hit still growing cane because harvest season takes about six to eight months,” he said.

For the coming crop year, Azcona said the country won’t be experiencing any supply constraints as it is assured of a “very ample buffer stock.”

“For the initial balance stock for this crop year, we began our locally produced sugar with a 450 percent increase versus last year. Last year, we were facing a shortage,” Azcona said.

“Since the harvest season began, we will see an increase in raw sugar stock as the Philippines is mainly a raw sugar-producing country,” he added.

In the past crop year, Azcona said, the typhoons that entered the country slashed sugarcane production and the SRA had authorized two importation programs to plug the supply shortfall.

The first round, as stated in Sugar Order No. 6, involved the importation of 440,000 MT of refined sugar — 200,000 MT would go to customers and the other 240,000 MT to build the buffer stock.

Azcona said for SO No. 6, 420,000 MT of refined sugar have arrived and the volume of stock withdrawals is less than 200,000 MT.

SO No. 7 covered the second importation round involved 150,000 MT of refined sugar to stabilize prices and beef up the country’s stockpile. So far, 30,000 MT of refined sugar reached the archipelago and they are expecting more imports to come in.