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HomeIndustry & Updates‘Tight’ supply pushes sugar prices to record highs

‘Tight’ supply pushes sugar prices to record highs

Citing the extensive damage caused by Typhoon “Odette” in sugar-producing provinces, the Sugar Regulatory Administration (SRA) will import 200,000 metric tons of sugar to address the resulting “very tight” supply and cool local prices that have skyrocketed to record highs.

“According to SRA’s projections on sugar supply and demand, [the damage caused by Odette] will give the country a very tight sugar stock balance at the end of milling, which will not be enough to cover the two to three months demand for refined sugar in between the milling seasons,” said SRA Administrator Hermenegildo Serafica in a statement on Tuesday.

The country’s sugarcane sector incurred P1.5 billion in losses as the typhoon devastated sugarcane crops, sugar stocks in warehouses and facilities and equipment of sugar mills and refineries in key sugar milling districts.

Reduced estimates

This prompted the SRA to cut its working crop estimate of raw sugar production for crop year 2021-2022 to 2.072 million MT, from 2.099 million MT.

A crop year begins Sept. 1 and ends on Aug. 31 of the following year.

Likewise, the Philippine Association of Sugar Refineries reduced its refined sugar output forecast to 16.748 million 50-kilogram bags (LKg) from its initial projection of 17.572 million LKg prior to Odette.

As a result, the SRA said wholesale and retail prices of raw sugar and refined sugar have shot up to record highs.

SRA data showed that as of Jan. 23, the wholesale price of raw sugar in the National Capital Region was P2,000 per 50-kilogram bag while refined sugar was at P2,900, from P1,700 and P2,150 in January last year. Refined sugar, on the other hand, is now selling at P57 a kilo from P50 last year.

Serafica said the demand for raw sugar and refined sugar for January has increased as the economy has reopened with the decline in COVID-19 cases.

Food security

“Hence, the need to augment sugar stocks to ensure food security and availability of sugar to cover sugar demand until the next crop year or milling season begins again,” he added.

The planned importation of standard and bottler’s grade refined sugar, according to the SRA head, “will leave the country with enough buffer stock to tide over until the start of the next milling season.”

The latest importation round is “open and voluntary” to industrial users of refined sugar in good standing that are duly registered international traders.

The SRA refers to industrial users as “confectioneries, biscuits, bread, candies, milk, juice, and food and beverage manufacturers” using refined sugar in manufacturing their products in the country and selling them in the domestic market.

Interested entities may lodge their import applications with the SRA offices in Quezon City or in Bacolod City no later than Feb. 14.

Various stakeholders, however, have slammed the SRA’s recent decision to import sugar, especially during the peak of the sugar milling season.

Former SRA board member Emilio Bernardino Yulo said the agency’s issuance of the order was “very ill-timed,” adding such a move “is adding insult to injury.”

“[T]his is appalling that the very agency that is supposed to protect us seems determined to kill the industry,” said Manuel Lamata, president of United Sugar Producers Federation. INQ

The above news was originally posted on business.inquirer.net

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