The USDA has lowered its forecast for PHL’s raw sugar production.

The USDA has revised its yearly prediction for raw sugar production in the Philippines due to the effects of El Niño and a decrease in sugarcane cultivation.

The USDA’s Foreign Agricultural Service (FAS) has reported that raw sugar production for marketing year 2024 is now estimated at 1.8 million metric tons, which is 5.3% lower than the initial estimate.

The marketing year of the USDA starts in September and ends in August, aligning with the sugar industry’s crop year.

The prediction from FAS is lower than the amount stated in Sugar Order No. 1 by the Sugar Regulatory Administration (SRA).

The SRA stated that the production of raw sugar may potentially reach 1.85 million metric tons, although it will be influenced by the extent of the current El Niño.

The government weather service’s official forecast predicts that the peak of the El Niño will occur between late 2023 and early 2024.

“The El Niñ

This occurrence leads to a higher chance of lower than average precipitation and decreased crop production, according to the FAS.

According to the FAS, the area dedicated to growing sugarcane is expected to decrease to 385,000 hectares, slightly lower than the initial prediction of 390,000 hectares. This decline is attributed to the decrease in sugar acreage in Batangas due to the closure of Central Azucarera Don Pedro.

“Although there was a decrease in land area in Luzon, there will be some compensation from the expansion of sugarcane areas in Mindanao, estimated to be around 10,500 hectares,” the statement read.

The FAS predicts that there will be no imports of raw sugar for the rest of the year, due to the government’s efforts to support domestic producers. However, it is expected that there will be 240,000 MT of refined sugar shipments.

The predicted need for unprocessed sugar remained consistent at 2.2 million metric tons for the current market year.

“The continued high costs of sugar and products that use sugar will deter any increase in consumption,” stated Adrian H. Halili.