Sugar output seen flat next crop year

The country’s raw sugar output is seen to stay flat in the coming crop year as low productivity remains an issue amid the continued discussion of trade liberalization, the United States Department of Agriculture (USDA) said.

In a report, the USDA-Foreign Agricultural Service (FAS) said raw sugar production is forecast to remain at 2.1 million metric tons (MT) in the next crop year, which will start in September 2021 and end in August 2022.

The figure is a flat growth from the projected 2.1 million MT production for the current crop year, down 4.5 percent from its initial production of 2.2 million MT.

“Factors limiting growth include the slow decline in sugarcane area and low farm productivity, particularly in areas outside Negros Island that pull down the national average,” the USDA said.

“While the industry aims to boost yields, results are not expected for two to three years when funds and implementation strategies are in place,” it further said.

The USDA also cited climate as another major factor affecting production as drought or too much rain have an adverse effect on production.

The Sugar Regulatory Administration recently adjusted its sugar production target for the current crop year to 2.1 million MT from its earlier target of 2.19 million MT.

It also terminated the seven percent export allocation for the US for the current crop year, which means 100 percent of the country’s sugar output for the year will go to the domestic market.

The SRA issued the amendment order due to the more severe than initially expected impact of La Niña, which brought heavy rains in all sugar producing regions, even flooding several sugar cane fields in Negros Occidental particularly in Silay, EB Magalona, Victorias, Manapla and Cadiz.

Based on figures from the SRA, raw sugar production declined to 1.54 million MT as of March 28, lower than the 1.58 million MT registered in the same period in the previous crop year.

“The government’s consideration of liberalizing the sugar industry is also a cause of concern among farmers and millers,” the USDA said.

“Stakeholders believe the proposed trade liberalization would place significant challenges on the sugar industry, which is not yet equipped to face open competition,” it said.

The National Economic and Development Authority earlier commissioned a study on the assessment of reform directions for the sugar industry. Among the policy recommendations concluded by the study include increasing productivity, lowering costs and improving institutional support mechanisms, while noting that any trade liberalization should be implemented gradually and only partially to ensure it will benefit all consumers and not unduly penalize sugar industry stakeholders.