Lower sugar production pushes up wholesale and retail prices in May–report

The country’s raw sugar production as of May 22 was down 14.55% to 1,765 MMT from 2,065 MMT recorded a year ago, according to data from the Sugar Regulatory Administration (SRA).

The SRA forecast the country’s total sugar production for the current crop year to be 1,982 MMT, the lowest in more than a decade. (Related story: https://businessmirror.com.ph/2022/03/10/phl-may-see-lowest-sugar-output-in-a-decade/)

SRA data indicated that total cane crushed during the reporting period reached 20.455 MMT, which is 15.82 percent lower than the 24.3 MMT recorded last year. However, sugar yield increased slightly by 1.74% to 1.75 50-kilogram bags per tonne of cane (LKg/TC) compared to 1.72 LKg/TC last year.

The country’s raw sugar demand also fell by 2.13% to 1.596 MMT from 1.631 MMT. Total raw sugar stocks as of May 22 fell by more than a third to 339,290.02 MT from 516,683.10 MT due to lower production.

The SRA data also showed that the country’s refined sugar production fell slightly to 681,150.15 MT from 690,663 MT. However, local demand for refined sugar increased by 5.79% to 769,500.6 MT from 727,351.15 MT last year.

The total physical inventory of refined sugar as of May 22 stood at 143,896.05 MT, which is 57.82% less than the 341,182.10 MT recorded last year.

Due to lower sugar production, wholesale and retail prices for raw and refined sugar have increased by double digits on an annual basis.

The average price of sugar at the factory increased by 38.47%, from 1,637.16 pesos per KG to 2,267 pesos per KG. The average wholesale price of raw sugar increased by 41.67% year-on-year to reach P2,550/Kg, while refined sugar reached P3,250/Kg, 38.3% higher than the 2,350 P/LKg of last year.

The average retail price of raw sugar increased by 20% year-on-year to reach P54 per kg, while the average retail price of refined sugar increased by 28.44% on a year-on-year basis to reach P70 per kg , according to data from the SRA.

The shortfall in domestic production and supply of raw and refined sugar prompted the SRA to allow the import of 200,000 metric tons of sugar to stabilize domestic prices.

SRA administrator Hermenegildo R. Serafica said earlier that “runaway sugar prices” could have been avoided if the government’s import program had not been stalled by legal challenges. (Related story: https://businessmirror.com.ph/2022/05/23/local-sugar-prices-surge-as-supplies-shrink/)

“This would have been solved earlier by the stalled implementation of SO [sugar order 3]. Either way, it is hoped that this import will cushion the surge in sugar prices,” Serafica told BusinessMirror via text message last month.

SRA data showed importers have yet to bring in refined sugar under the sugar import program for the 2021-2022 crop year since SO 3 implementation resumed last month. .

About Timothy Cheatham

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