The Philippines has been short of sugar production for many years, and it will stay that way for a long time, a top official of a sugar-producing company said.
This, according to Central Azucarera de Bais Chairman Steven Chan, should be enough reason for the Philippines to stop allocating a portion of the country's annual sugar production for exports.
To recall, every start of the crop year, the Sugar Regulatory Administration (SRA), the government agency tasked to regulate the sugar industry, gets to decide how much of the country’s expected sugar production gets to stay here in the country and how much will be exported to the world market to balance the prices.
Sugar production is divided into different classifications, including ‘B’ for domestic sugar, ‘A’ for sugar exports to the US, ‘D’ for sugar exports to the world market or other countries, and ‘C’ for reserves.
For this crop year, SRA has decided that 7 percent or 153,000 metric tons (MT) of the country's sugar output will be exported to the United States.
In the Philippines, the sugar crop year starts in September and ends in August of the following year.
Chan argued, however, that "for the last eight to 10 years, we have been a net importer of sugar" and that "there has been no excess" in the country's annual sugar output.
"We have found out that our total average consumption in the last four years is 2.5 million MT and we produce way lower than that," Chan said in a phone interview.
"We are definitely a net importer. We have no treaty obligation . There is no sense why we are doing something that we are doing. There is absolutely no reason to export when you have no excess," he added.
For this crop year, sugar production is estimated to be "more or less" 2.19 million MT, according to SRA. This is 2 percent higher than the 2.145 million MT produced in the previous crop year, which ended last August.
Based on SRA's estimate, this should be enough to cover the domestic demand, which is expected to take up only 1.97 million MT of the total output. This, however, is lower than the 2.5 million MT average consumption Chan mentioned.
Moreover, a separate data he provided also showed that in the last four crop years, annual domestic sugar consumption didn't go down below 2.3 million MT. In fact, consumption was on an uptrend from 2016 to 2018 and only started going down in 2019.
Chan said that if the country continues to export sugar to the US, producers will only lose money, and only traders to benefit from it.
Normally, A sugar is priced lower than B sugar. As of January 17, for instance, the average mill site price for A sugar stood at P1,270.05 per 50-kilo bag, while B sugar costs P1,505.29 per 50-kilo bag, based on SRA data.
He also said that the Philippines will "never have a surplus in sugar production because we consume more than what we produce" and that has always been the case for the past eight to 10 years.
Furthermore, he said that the "population never stopped growing" and that "we are running out of land resources land reform housing and we are running out of farmers."