While local sugar supply is still not as it used to be, sugar production might lose its tightness soon. The milling season will be peaking this month, after all.
Based on the latest data of the Sugar Regulatory Administration, local raw sugar production dropped by as high as 27 percent as of the first week of December 2019.
According to Phil Star, this means output has dropped to 311,617 metric tons.
As of the first week of December 2017, the recorded amount was at 429,680. A considerable drop is apparent.
Sugar crop production usually starts during September and ends in August.
Data on sugar production between 2018 and 2019, would show output in terms of 50kg bags reached only 6.23 million.
Compared to the previous timeframe between 2017 and 2018, this is significantly lower.
The previous volume was at 8.59 million.
Also, the country’s raw sugar demand dropped by 6 percent.
The demand is now only at 343,597 MT.
Sugar Prices Increasing
The same downward trend is evident in the production of refined sugar. The drop was significant at 30 percent.
It is now down to 110,654 MT.
Price movements are nothing to be happy about either.
Mill gate price of sugar is now up by 3 percent.
A 50-kilo bag of sugar now costs P1,515. In specific markets, though, retail prices have decreased.
From P56 per kilo, some are selling at P45 per kilo.
For this crop year, the majority of the national production will be for domestic consumption. The bulk of the target product is only for the local demand amid an anticipated relatively flat output in the coming days.
Sugar Production Mainly For Local Consumption
For this crop year, starting from September 2019 and ending in August 2020, the national target production is at 2.096 million MT of sugar. This is not that impressive.
It only represents a 1.1 increase from the previous crop year’s production, which reached 2.072 million MT.
Local demand for sugar cannot be underestimated.
The country requires at least 2.2 million MT in supply to not fall into a shortage level domestically.
Moreover, several sectors that require sugar as their primary raw material are set to expand. This includes the local food processing and beverage sectors.
Not only can prices increase because of this inadequate supply, but consumers themselves also have to adjust to higher sugar taxes.
Local consumption of sugar is categorizable into three groups – for industrial user consumption at 50 percent, household consumption at 32 percent, and institutional consumption at 18 percent.
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