The United States Department of Agriculture (USDA) said that the country’s sugar production for crop year 2021-2022 is expected to be flat at 2.1 million metric tons (MT) as low productivity remains an issue apart from the continued discussion of trade liberalization in the Philippines.
In its report released last week, the agency added that other factors that may limit growth includes the slow decline in sugarcane area and low farm productivity, particularly in areas outside Negros Island that pulls down the national average.
Sugar crop year begins on September 1 and ends August 31 of the following year.
“While the industry aims to boost yields, results are not expected for two to three years when funds and implementation strategies are in place. Moreover, climate will remain a major factor as drought or too much rain have an adverse effect on production. Crop diversification is also a possibility, as some farmers may decide to shift to more profitable options,” it further explained.
The USDA also said that consumption in the Philippines for crop year 2021-2022 is expected to rebound by 200,000 MT with households and institutions driving the recovery as quarantine restrictions are loosened which is expected to drive food and beverage manufacturers to increase production and sugar usage.
The agency also factored in next year’s national elections when food consumption traditionally increases due to campaigns and political meetings.
Likewise, the report cited that for the period, refined sugar imports are likely to reach 150,000 MT after dropping to 25,000 MT the prior cropyear as the economy reopens and beverage manufacturers expand production.
The USDA noted that the 150,000 MT expected imports are still lower compared to pre-pandemic numbers.
However, the agency revised down its projections for the Philippines’ consumption and imports for crop year 2020-2021.
The agency slashed its projected domestic consumption projections by 300,000 MT to 2 million MT as the Sugar Regulatory Administration (SRA) reported that withdrawals of locally produced sugar are slightly below 2 million MT due to weaker sugar demand from industrial users as a result of quarantine restrictions. Imports are also adjusted to 25,000 MT from 200,000 MT.
The adjustments were also made after the SRA announced that from 2.2 million MT, local sugar production for crop year 2020-2021 is now only at 2.1 million MT.
