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By Chino S. Leyco, Researcher
STATE-RUN Sugar Regulatory Administration (SRA)
warned Friday that the country may suffer from a tight supply of
sugar due to lower-than-expected cane deliveries to millers last
month.
Rafael L. Coscolluela, SRA administrator, said
that millers’ production was 50 percent below last month’s
output, owing to fewer supply of raw materials in Negros Island, a
major sugarcane producer.
“Milling started every September, and because
of the wet season in Negros, it resulted in 40 percent less delivery
of cane. The purity was also affected. It dropped 0.21 percent from
1.76 percent,” Coscolluela said in a telephone interview.
The low production also resulted in a
significant increase in sugar prices, Coscolluela said, adding that
SRA monitoring showed that retail prices already average P40 a kilo
from P35 to P36 a kilo previously.
“We’re on alert, but by next week sugar will
normalize because we will use our allocated reserves. This is just
temporary,” he added.
Coscolluela said earlier that the country will
suffer from a sugar glut in the next two years.
He even said that at end-August, the agency
already saw a surplus of 671,037 metric tons. This is tantamount to
losses of at least P14,720 a hectare for farmers.
The agency said it sees the redirection of
sugarcane production to ethanol only after three years.
“The message for the sugar industry is,
tighten our belts for the next two years because we’re looking at
[the] largest overhang we’ve seen for the last 10 years, or 20
years,” he said.
Coscolluela also said that SRA projects that at
end-August next year, the beginning balance will stand at 463,851
metric tons, and in the same period in 2009 at 272,047 metric tons.
Remedies that may be pursued to prevent a
free-fall in prices include higher sugar exports and aggressive
domestic consumption.
Given this situation, the country will allocate
20 percent for exports, 74 percent for local consumption and
six-percent to meet the United States quota, Coscolluela said.
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