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Jan 08, 2024

Sugar imports needed after deep output drop

The Philippines is estimated to incur a “significant drop” of 100,000 metric

The Philippines is estimated to incur a "significant drop" of 100,000 metric tons (MT) in refined sugar production and the Sugar Regulatory Administration (SRA) said this "alarming" situation requires another round of importation to plug the projected shortfall.

In an interview on Tuesday, SRA acting administrator Pablo Luis Azcona said the refined sugar output is "down by a significant amount" as the milling season ended earlier than scheduled and unfavorable weather conditions affected the yield.

The SRA is in the process of finalizing production data but its latest estimates showed that the industry produced only 640,000 MT for the current crop year, much lower than the 750,000 MT recorded previously.

Azcona said most refineries already ended operations this month after they were forced to start the milling season ahead of time in August last year to address supply tightness.

"It's all affected by the weather. Farmers will not be able to harvest sugar due to heavy downpours. As a result, no sugarcane will reach the mills," he told reporters.

The problem, however, is that refineries have stopped operating as they ran out of fuel to mill their sugar.

"Refineries informed us around the time of heavy rains early this year, their supply of sugarcane was depleted and every time a sugar mill shuts down and restarts, the amount of fuel consumption increases," said Azcona in a mix of English and Filipino.

"When they run out of sugarcane, there's nothing to mill so they have to stop and then you keep consuming fuel because the boiler is still operational because it can't be shut down and it's difficult to restart it," he added.

The SRA chief explained that the refinery uses fuel, either biomass or bagasse (sugarcane pulp), to mill the sugarcane and produce raw sugar. Subsequently, the refinery will extract the raw sugar and change it into refined or white sugar.

"That's an alarming situation," said Azcona, adding the SRA is in the process of consulting industry stakeholders before having another go at refined sugar importation capped at 150,000 MT.

But before allowing the entry of sugar imports, he said the SRA will conduct an inventory of the existing supply and consult all stakeholders. It will also commission an independent survey to verify the SRA's projections.

"That's why we’re updating production numbers to confirm if the estimates will be hit, better or slightly worst," he said.

Aside from that, the SRA is also adjusting the schedule of commencing the milling season to Sept. 1 so that the cropping cycle will not be disrupted and the sugarcane will fully mature resulting in better yield. INQ

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