Sweet Sweet Year

Sweet Sweet Year

Agri Dep't Reports Bumper Sugar HarvestBy: Kristine L. Alave

Philippine Daily Inquirer

MANILA, Philippines—It looks like it will be a sweet year for the sugar industry.

The Philippines will export sugar again as the country is enjoying a bumper harvest this year, Agriculture  Secretary Proceso Alcala said.

The country’s sugarcane fields yielded a harvest of 2.39 million metric tons for the crop year of 2010-2011, a 21.3 percent improvement over last year’s volume, the DA said.

Because of the bumper harvest, which was a result of good weather in the canefields, the country is poised to export at least 300,000 metric tons  of raw and refined sugar this year, Alcala said. He noted that the Philippines may cease to import sugar in the future

“We have been making great strides in sugar production the past year. This may very well be the start of the country producing more than enough to meet its domestic requirements and quota obligations, but also to ensure that sugar farmers have a reasonable, sufficient, and ‘livable’ income,” Alcala said.

The agriculture department, he said, is eyeing to sell sugar in Southeast Asia. Recently, countries like Indonesia, China, South Korea  and Japan said they would buy sugar from the Philippines. The Philippines also exports sugar to the United States under a preferential treatment scheme.

Sugar used to be a major export crop of the Philippines. The country was a net sugar exporter, selling as much as two million tons of sugar in the 1970s, according to data from the Philippine Sugar Millers Association. However, production and exports declined in the following decades due to low mechanization and the monopolization of the industry during the Marcos era.

The 300,000-ton export volume eyed by the Department of Agriculture  this year is the highest volume seen since the 1990s. In the last few years, export volumes ranged between 100,000 and 200,000 tons, data from the PSMA showed.

The Philippine sugar industry’s performance mirrored the gains in other crops. Rice and corn, the two main staples of the country, also showed robust recovery in the first half of the year.

Harvests of palay or unmilled rice and corn was at 7.58 million tons and 3.31 million tons, respectively.

The crops subsector — which contributed more than half (51.8 percent) of  total agricultural output — grew by 11.1 percent. Overall, the country’s agriculture sector grew by 5.48 percent  in the first semester of the year

The reserve sugar harvest for export increased not only due to the high yield, but also because of reduced demand.

According to the DA, the supply of raw sugar increased five-fold to more than 623,500 tons. Sugar consumption, on the other hand, dipped to 1.5 million tons this year, from 1.8 million tons  in 2009-10.

This led to a drop in raw sugar prices. According to the DA data, raw sugar fell from a high of P2,480 per 50-kilo bag to P1,300 this year.

Refined sugar demand also declined to 655,840 tons, 31 percent less than last year, leaving a balance of more than 300,000 tons.

“We look forward to build from these gains next year, as more farms are planted and program interventions continue for CY 2011-2012,” he said.

Alcala said the government aims to boost the sugarcane industry to ensure local supply and make the country attractive to bioethanol producers.

He noted that the DA wants to improve the efficiency and productivity of small farms. According to Sugar Regulatory Administration data, about half of the country’s sugarcane fields are less than five hectares.

Alcala also said the DA is planning to build better infrastructure for sugarcane planters and millers such as bigger and automated loading ports, farm-to-mill roads, and irrigation facilities.

http://business.inquirer.net/13781/agri-dep%E2%80%99t-reports-bumper-sugar-harvest

Sweet Philippines

Negros - Philippines

Philippines was once a major sugar exporter, and it is a good news for us that in the present, we are slowly getting back on track. Sugar is one of the main ingredients that Filipinos use in baking, not only baking but also for processing other goods containing sugar. As what we have experienced lately, sugar prices rose which meant higher prices for baked foods such as our famous "pandesal". In my experience, it was during summer where I had just started baking different kinds of sweets, sugar went to a price for about 60 pesos per kilo. When an ingredient becomes expensive, selling prices for final products by the company also increases, and by then becomes really expensive for local buyers because retailers would also sell it for a higher price. I once saw a television news where a reporter was interviewing a local person buying "pandesal" in a bakery, the buyer was complaining that the famous good was once bought for 1 peso per piece, but at that time, pandesal was bought for 2 pesos apiece. Can you imagine how much had the sugar price hike affected the price of the pandesal? How much more had it affected other goods such as breads, cakes, and other processed goods? 

According to an article (http://www.gmanews.tv/story/181417/govt-eyes-sugar-imports-subsidy-after-price-hikes), because there was a shortage in sugar, they imported from other countries, which made the sugar price higher. Going back to my original source article, it said demand for sugar at that time dramatically dropped. For discussion purposes, let us assume that the supply at that time was 50(including imports). Because of the price, demand by food processors dropped at, say, 45. Surely, for local consumers, there are many alternatives for processed foods containing mainly of sugars such as ice creams, cakes, breads, and other foods that people usually buy, which makes consumer demand lower, say, 30. Since most of the consumers had discovered many other alternatives for these kinds of goods, demand stayed at 30.  These made suppliers expect less for how much they would supply their buyers, say, 35. But because of the good weather in their cane fields, supply went higher than expected. They exceeded supply, say 100, and it even further looked that supply exceeded because of the 30 quantity demanded. 

They had enough sugar for exports, and enough supply for local buyers. The article mentioned that if these kinds of improvements will continue, our country will no longer have to import sugar from other countries. If this will happen, in my understanding, it would lessen our imports, increase the exports, and by then increase our country's market value; which of course is a good thing. In my opinion, if we will no longer have to import, and if they would further improve their productivity, we might just become the number one exporter of sugar. This achievement would become a major stepping stone for Filipinos towards progress. As the article stated, it would also make our country attractive for bio ethanol producers. I say, they should invest on that (bio ethanol products) after achieving the number one spot, or if not, at least one of the top spots for sugar exports :). In that way, we might as well just become bio ethanol producers someday.  This would mean, again, progress.