Despite Pandemic, Philippines Sugar Supply Hit Its Highest Level in 3 Years

Sugar Regulatory Administration (SRA) Board Member Roland Beltran said in a text exchange that as of July, the country’s total sugar supply, including the 2.1 million metric tons (MT) output for the current sugar crop year, now stood at 2.39 million MT. The country’s total supply of local sugar had hit its highest level since 2017 amid favorable weather conditions. The Philippines sugar crop year starts on September and ends on August the following year.

In its own projection, the Philippines’ Sugar Regulatory Administration (SRA) was slightly more optimistic, setting its production target to 2.1 million MT, unchanged from the previous year and slightly higher than the 2.03 million MT of sugar produced during the previous crop year. As a result, it is seeing an increase in demand of the commodity, which now stood at 2.35 million MT. This, as it expects cane sugar consumption to rise with the global economic recovery from COVID-19 and with food and beverage manufacturers expected to expand production.

To meet this growing demand, FAS said the Philippines may likely import as much as 450,000 MT of sugar, which would be the highest amount of imported sugar to enter the Philippines in the span of a year. During the sugar crop year two years ago, the Philippines only imported 350,000 MT of the commodity and then another 400,000 MT the following year. In 2019, sugar, valued at P35.5 billion, was the nation’s fifth largest agricultural crop product by value after rice, bananas, corn, and coconuts.

Beltran said that the “weather was good beyond expectations” for the current crop year, which is about to end in six weeks. He also said that the COVID-19 pandemic didn’t have much impact on the output since the “the production of the sugar central continued during the lockdown as among those exempted in the IATF guidelines.”

In April, the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) here in Manila released a report that for this year, the Philippines is seen to import as much as 400,000 MT of sugar as local production of the sweetener may fall to its lowest level in a decade, leaving a wide gap between the country’s supply and demand. Beltran, while dismissing the forecast, said while the country’s demand for sugar indeed fell during the COVID-19 lockdown, the country is assured of sufficient supply. “The climate, alone, is so unpredictable that it could prove or disprove predictions,” he added.

Because of this, Beltran declined to give forecast for the next crop year but he said SRA is “hopeful as we continue to remind our stakeholders to inculcate to the workforce, our frontliners in the sugarcane industry, the practice of social distancing and other heath protocols so that the planting, harvesting, transporting, and production of sugar will not be hampered”. The other day, the Philippine Sugar Millers Association (PSMA) urged the Philippine government to return the P2-billion funding for Sugar Industry Development Act (SIDA), the law that aims to develop the local sugarcane industry.

The budget, the group said, is badly needed by the sugar industry “for block farms grants, research and development, socialized credit, scholarship grants and infrastructure development”. Implemented in 2015, SIDA is intended to bolster the sugarcane industry, which currently contributes P70 billion to the Philippine economy every year. The law should be able to boost such contributions to P100 billion annually.

Five years into the law’s implementation, the Philippines still has low sugar yield at 5.1 tons of sugar per hectare. And from a close to P2-billion budget for SIDA at SRA’s disposal in 2016, SRA only received P500 million to implement the law last year. For this year, SIDA was likewise supposed to have P500 million but because of COVID-19 pandemic, the Department of Budget and Management (DBM) trimmed this further to only P325 million.