THE US Department of Agriculture (USDA) downgraded its annual raw sugar forecast for the Philippines, citing El Niño and the decline in the area planted to sugarcane.

According to a report by the USDA’s Foreign Agricultural Service (FAS), raw sugar output is now estimated at 1.8 million metric tons for marketing year 2024, a downgrade of 5.3% from initial estimates.

The USDA’s marketing year runs from September to August, corresponding with the sugar industry’s own crop year.

The FAS forecast is less than the estimate reported by the Sugar Regulatory Administration (SRA) in Sugar Order No. 1.

The SRA said raw sugar output could reach 1.85 million metric tons, but will vary depending on the severity of the ongoing El Niño.

Official projections by the government weather service put the peak of the El Niño at late 2023 to early 2024.

“The El Nio phenomenon increases the likelihood of below-normal rainfall and reduced yields,” the FAS said.

The FAS also projected that land planted to sugarcane will decline slightly to 385,000 hectares from the initial forecast of 390,000 hectares. It said sugar acreage declined in Batangas after the closure of Central Azucarera Don Pedro.

“Despite the loss of area in Luzon, expansion in sugarcane areas in Mindanao will partly compensate… about 10,500 hectares,” it said.

The FAS assumes no imports of raw sugar during the remainder of the year “as the government seeks to protect local producers.” Shipments of refined sugar are expected to hit 240,000 MT.

Forecast demand for raw sugar was unchanged for the market year at 2.2 million MT.

“The high prices of sugar and sugar-using products will continue to discourage increases in consumption,” it said. — Adrian H. Halili