The Philippines will be allocating all its sugar production in crop year (CY) 2021-2022 for the domestic market amid a projected lackluster output due to the adverse impact of weather on sugarcane crops to ensure sufficient supply of the sweetener.
The Sugar Regulatory Administration (SRA) Board issued on Tuesday Sugar Order (SO) No. 1 that outlined the production allocation policy for the current CY, which will be all “B” sugar or for the domestic market.
The SRA board made the decision following the recent announcement of the state weather bureau of the reemergence of the La Niña phenomenon in the country that will coincide with the harvest and peak milling season of sugarcanes in key production areas.
The SRA’s initial pre-milling estimate for raw sugar production in CY 2021-2022 stands at 2.099 million metric tons (MMT), almost two percent lower than the 2.138 MMT recorded output in the previous CY.
Despite a carry-over raw sugar volume of 158,557 MT, the country’s sugar supply is better served with an all “B” domestic sugar allocation for the crop year, based on the SRA Regulation Department’s supply and demand projections.
“After consultation with sugar producers, almost all stakeholders recommended an all ‘B’ sugar allocation, with all farmers associations/federations present in the consultation calling for a 100 percent ‘B’ sugar allocation for crop year 2021-2022,” SO 1 read, a copy of which was obtained by the BusinessMirror.
The SRA will monitor and undertake assessment of the current crop year’s sugar production and withdrawal trends to be able to determine if necessary adjustments to the sugar production allocation is needed.
This is the second time in a decade that the Philippines allocated all its sugar production for the domestic market with the last time being in crop year 2015-2016.
The BusinessMirror earlier reported that sugar millers have thrown their support behind any decision that the SRA board would make regarding the allocation of the country’s sugar in the current crop year. (Read more: https://businessmirror.com.ph/2021/08/30/sugar-millers-defer-to-sra-on-allocation-decision/)
However, the Philippine Sugar Millers Association (PSMA) that the SRA must explain to the US Department of Agriculture should it decide not to allocate an “A” sugar or sugar for the US market to be able to keep the Philippines’s preferential right to the US sugar market.
“PSMA emphasizes that any decision not to allocate an ‘A’ this coming crop year is TEMPORARY undertaking, only for CY 2021-22, and MUST be properly explained by SRA to the US Department of Agriculture to ensure it will not prejudice our historic and preferential right to the US sugar market or our US sugar quota, especially since US market is asking for more sugar with market prices at all-time high,” the group said in a letter to SRA Administrator Hermenegildo R. Serafica last August 27.
SRA board members have earlier voted to allocate all sugar output for the domestic market due to the projected anemic production for the current CY. (Read more here: https://businessmirror.com.ph/2021/08/30/sra-board-members-push-for-100-b-sugar/)
The two sugar industry representatives to the SRA board also lamented the lack of “proper interventions” to boost the sugar industry’s productivity amid the threat of climate change.