SRA: Sugar refining license to include output
The Philippines’ SRA will require refiners to declare minimum refined sugar production in annual licenses and verify output monthly from October. Refiners estimate 670,000 MT production against 1 MMT demand. Falling raw sugar output, RSSI damage and raw sugar costs may worsen shortages, prompting reduced-volume imports in 2027.
The Sugar Regulatory Administration (SRA) has introduced a new system to tighten its oversight of the country’s refined sugar production in its bid to get a clearer picture of the Philippines’ supply situation.
SRA Administrator Pablo Luis Azcona said the agency ordered refiners to stipulate in their respective licenses the minimum volume of refined sugar they can produce in a given crop year.
“It is also a first in SRA’s history that their refining license indicates the minimum volume [for refined sugar and bottlers’ grade] to be produced,” Azcona told reporters in a recent interview.
“We need to know how much they can produce, so we can anticipate whether we will import or not. Or determine what is lacking, \[if\] they couldn’t meet their projection. That’s the most important thing.”
Azcona said the agency would verify refiners’ projected output on standard refined sugar and premium refined or bottlers’ grade sugar on a monthly basis starting this October.
“Every month, we’ll check whether their \[production matches their estimates or not\]. This will actually ease our data, since our biggest question mark every year is we don’t know the volume of sugar they will refine.”
At present, the SRA chief said refiners committed to producing as much as 670,000 metric tons (MT) of refined sugar in the current crop year following their recent meeting in Cebu. The country’s demand for refined sugar averages around 1 million metric tons (MMT).
The estimated output, however, hinges on two factors: price and availability of raw sugar.
“If the price of raw sugar increases too much, it is not financially viable for the refiners to refine. They are private companies; they also need to earn. The second is the availability of raw sugar,” Azcona said.
The SRA had projected raw sugar output in crop year (CY) 2026-2027 to decline to 1.662 MMT, the lowest level in more than two decades.
Azcona attributed the expected drop in local raw sugar production to the impact of red-striped soft scale insects (RSSI) on sugarcane fields, citing “early estimate” from its research department.
The latest time the country’s sugar output reached the SRA’s projected level for CY 2026-2027 was in CY 1999-2000, when it hit 1.619 MMT.
New import rules
Last July, Agriculture Secretary Francisco Tiu Laurel Jr. said the Philippines will import refined sugar next year under a new system to plug the shortfall in domestic output without denting millgate prices.
He noted that the government will allow the importation of refined sugar in 2027 on the back of lackluster output, particularly for bottlers’ grade, typically used by beverage makers.
“For next year, let’s accept the fact that we don’t have enough bottlers’ grade sugar based on our production, so we still need to import,” he said in a recent meeting with sugar industry stakeholders.
”But our new strategy is that we will reduce the projected volume needed to import by 20 percent…we will only add more if the allowed quantity is still not enough.”
The agri chief, who chairs the SRA Board, said this would deviate from previous sugar import programs where importation covered the entire estimated volume of shipments, which “slightly affected” millgate prices due to an uptick in local production.
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Source : BusinessMirror
