Sugar production estimate cut amid reduced tonnage, rising yields

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THE Sugar Regulatory Administration (SRA) reduced its estimate for sugar production for the crop year 2018-2019 to 2.079 million metric tons (MMT) from 2.225 MMT previously, with gross tonnage declining while favorable weather produced higher yields.

“As of week ending Jan. 27, we are still almost as the same level as last year. What we don’t know is how long the milling period will last. Apparently, we have hit the peak of the milling season. Usually, when you have a long period of fair weather, it is easier for our farmers from the mountains to bring their cane to the sugar central. Assuming the milling season will be the same as last year, then we might hit the target but if the milling season is fairly short, then we might come out with a new crop estimate,” Emilio Bernardino L. Yulo, SRA Board Member Planters’ Representative, told BusinessWorld on the sideline of the Sugarcane Stakeholders’ Summit held in Quezon City on Monday.

“The original estimate was at 2.225 million metric tons. I think the SRA is about to release (an estimate of) 2.079 million MT,” Mr. Yulo added.

According to SRA data, raw sugar production for January during crop year 2017-2018 hit 256,336 MT. Total output for crop year 2017-2018 was 2.1 million MT.

“On the ground, our planters are experiencing reduced tonnages but higher purity. That’s brought about by weather conditions. Luzon and Visayas are down, but Mindanao is up,” Mr. Yulo said.

Meanwhile, SRA Board Member and Millers’ Representative Roland B. Beltran said that sugar production has significantly decreased over the years, and the industry is on its way to recovery after being affected by importation of high fructose corn syrup.

“We lost a lot of plantation area for many reasons. One of the reasons is the competition with banana plantations offering good deals [starting] five to six years ago,” Mr. Beltran said in a separate interview.

Mr. Beltran said that Budget Secretary Benjamin E. Diokno’s proposal to liberalize sugar imports will further reduce the production of sugar in the Philippines. Mr. Beltran pointed out that SRA has specific importation programs to address demand that cannot be filled by domestic sugar production.

“If we flood the market with imported sugar, the intention is to drive down the prices including mill gate prices, who would still plant sugar cane if they are incurring losses?” Mr. Beltran said.

“On the part of SRA, our programs for importation are timely… demand increased after high-fructose corn syrup imports were restricted,” Mr. Beltran added.

Mr. Beltran said that a two-day summit is being planned to identify the industry’s problems, and come up with recommendations to specific government agencies.

“After this summit, all the problems will be identified. We will come up with recommendations. What we are trying to achieve in this summit is to have an updated sugarcane industry roadmap,” Mr. Beltran said.

On the other hand, Mr. Yulo said that importers used to be required to supply a portion of their shipments to the food industry.

“We had an important program specific for the industrial users… In the old SRA, if you had an importation program, you had to give part of it to producers. That’s no longer done today. We have practically given up everything. What more can they ask?,” Mr. Yulo said.

Sugar Order (SO) No. 10 for crop year 2017-2018 called for the importation of 200,000 MT of sugar. SO No. 2 meanwhile called for the importation of 150,000 MT of sugar for crop year 2018-2019.

Mr. Yulo called on the Department of Trade and Industry (DTI) to address high retail prices, amid a push for a liberalized sugar industry by business groups and some economic managers.

“Why doesn’t DTI come in strong against those retailers selling at P60 (per kilo)? This is a consumer issue. This is no longer a regulatory issue. They can go as low as P55 or even P54, but how come they are allowing retailers, even supermarkets here in Metro Manila, to sell at P60 and we are being unfairly blamed for these prices?”

“If the DTI can prove that producers are at fault for high prices, we will allow them to import,” Mr. Yulo added. — Reicelene Joy N. Ignacio