Gain report: La Niña threat to PHL raw sugar production

October 5, 2020
Jasper Y. Arcalas (Business Mirror) |

The country’s raw sugar production in the current market year (MY) 2020-2021 may increase by 2.3 percent to 2.2 million metric tons (MMT) but a La Niña could dent output, according to a Global Agricultural Information Network (Gain) report.

The Gain report, prepared by the US Department of Agriculture-Foreign Agricultural Service in Manila, projected that local sugar production would increase for two consecutive MYs.

However, the Philippine Atmospheric, Geophysical and Astronomical Services Administration’s (Pagasa) recent warning of a likely La Niña “could moderately lower the production outlook,” according to the report.

“Raw sugar production in MY 2020/21 could be affected by a likely La Niña weather pattern, as the local weather bureau Pagasa issued an alert for Visayas and Mindanao during the last quarter of 2020. If realized, the likely impact would be a moderate decline in production,” it said.

The report said sugarcane area in the current MY is expected to stay flat at 401,000 hectares as planters continue to face labor shortages and remain cautious about the possible liberalization of the industry.

It added that total sugar consumption in the current MY could “recover slightly” to 2.3 MMT as the economy “opens up and more institutional users increase capacity” and demand for sugar-sweetened food and beverages improves.

The report noted that half of the country’s sugar demand comes from industrial users such as beverage and processed food manufacturers, hotels, bakeries and restaurants.

The Gain report said the Philippines is poised to fully fill its raw sugar quota to the United States set at 142,160 MT raw value  (MTRV), or about 136,201 MT commercial weight (MTCW) due to sufficient stocks, including carry-over volume.

“Due to high ending stocks of refined sugar, imports in MY 2020/21 are forecast slightly lower than previous years, provided MY 2019/20 raw sugar production targets are met,” it added.

The Gain report projected that sugar imports in the current MY would decline by 38.46 percent to 200,000 MT from previous MY’s 325,000 MT.