Sugar industry sees El Niño reducing output by 10-15%

SUGARCANE production may drop 10-15% depending on the severity of the El Niño dry spell expected this year, a sugar industry official said.

“For a starting figure, a drop of around 10-15% in production, (equivalent to) 180,000-200,000 metric tons (MT) of sugar might not be harvested…  200,000 (MT) is about four million bags,” United Sugar Producers Federation President Manuel R. Lamata told reporters via Zoom on Wednesday.

Mr. Lamata said a six- to eight-month dry spell may cause cane farmers with no access to water to stop farming.

On Tuesday, the Philippine Atmospheric, Geophysical and Astronomical Services Administration said the likelihood of an El Niño event in the fourth quarter has risen to 80%.

“If that really happens, that would be worse, not just for sugar but all agricultural products… Everything that’s agricultural will really be hit,” he said.

Pablo Luis S. Azcona, board member and planter’s representative from the Sugar Regulatory Administration (SRA), said that the impact of El Niño on sugarcane production will likely be reflected in the next cropping season.

“At this moment, (most sugar is in) the vegetative stage,” he told reporters in a separate Zoom briefing.

The cropping season for sugarcane typically starts in early September but last year, some farmers started planting as early as Aug. 15 which seemed to cause a 10% drop in output, he said.

Mr. Azcona said that the SRA is currently validating its production records with the milling season due to end next month.

Aside from reduced output, the cost of farm inputs like irrigation and fertilizer might rise 10%, translating to an increase in the sugarcane farmgate price by P5 to between P50 and P60, according to Mr. Azcona.

Mr. Lamata said solar-powered irrigation pumps could help farmers maintain their productivity.

Agriculture Senior Undersecretary Domingo F. Panganiban has been designated officer-in-charge (OIC) of the SRA, according to Mr. Azcona.

Citing the SRA charter, Mr. Azcona said the SRA board chairman steps in as acting administrator pending a more permanent appointment.

“(Appointing) an OIC is urgent because we have imports coming in and we still (processing) import clearances, so we need somebody in place,” he said.

The Palace confirmed the resignation of former SRA Administrator David John Thaddeus P. Alba on March 15. His departure took effect on April 15, with the Palace citing Mr. Alba’s deteriorating health.

In a statement, National Federation of Sugarcane Planters, Inc. (NFSP) President Enrique D. Rojas said that the designation of Mr. Panganiban “sends mixed signals” due to the recent controversy surrounding Sugar Order No. 6.

“Nonetheless, the NFSP grants Usec. Panganiban all the benefit of the doubt, while the propriety and legality of all matters relating to Sugar Order No. 6 is still up for debate,” he said.

Large shipments of sugar were brought in via the Port of Batangas earlier this year and were released on Mr. Panganiban’s authority. The shipments had arrived before the process for applying for import quotas under SO 6 had expired.

Mr. Panganiban had described the need to import sugar as urgent due to the impact of rising food prices on inflation.

Meanwhile, Mr. Azcona said that about 130,000 MT of refined sugar landed in the Philippines of the 440,000 MT authorized for import by SO 6.

SO 6 required that 100,000 MT of refined sugar be landed “as soon as possible” with another 100,000 MT arriving before April 1.

The remaining 240,000 MT will be retained as a buffer stock, according to instructions issued by President Ferdinand R. Marcos, Jr., in his capacity as Secretary of Agriculture.

Some 86,000 MT has been reclassified for domestic use and is set for release onto the market.

Mr. Azcona said that the suggested retail price for refined sugar has yet to be decided but expects it to remain at about P85 per kilogram.

The SRA has been working on amending a memorandum circular that would allow it to ultimately release smuggled sugar seized and donated by the Bureau of Customs (BoC).

Mr. Azcona has said that the Palace approved the donation of 4,000 tons of refined sugar seized by the BoC to the Department of Agriculture for sale at government-subsidized KADIWA outlets at P70 per kilogram, he said.

On Wednesday, DA price monitoring indicates that refined sugar market prices were between P86 and P110 per kilo, while washed sugar sold for P80-P96, and brown sugar P78-P95. — Sheldeen Joy Talavera