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How sweet is sugarcane in 2024?

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“Sugarcane is always sweet, people only sometimes so” – Myanmaran Proverb

Three years ago, the prices of sugar went up but only gradually. Still, this was an opportunity for the sugar producers, especially the small agrarian reform beneficiaries to produce more sugar to say the least. This is still economically favorable to them compared to in the last 10 to 15 years. At present, sugar prices per 50 kilograms run at 2,400 to 2,500 pesos.

The big question however is, “will the price of sugar continue to fall and up to what level?” Others argue that if the retail price of sugar continues to go up there is no reason that sugarcane as raw material will fall –  a sensible argument. Others claim this is an orchestrated or a syndicated strategy meant to benefit more of the sugar traders. This needs solid proof. Overall, the industry scenario presents a favorable condition in its supply chain.

‘SIGNIFICANTLY SWEET’

The 2023 global consumption volume was more than 180 million tons and expects an annual growth rate of 1 percent in the next eight years estimated at 198 million tons by 2032. Conversely, sugar value was much lower last year at 78 billion dollars while it was more than 113 billion dollars 12 years ago.

This year the sugar production is projected to reach 80 million metric tons due to favorable weather conditions in South America, particularly Brazil, the world’s largest sugar producing country is expected to produce more than 41 million metric tons. The Philippines is expected to contribute from 1.85 to 2.0 million metric tons according to the Sugar Regulatory Administration.

PHILIPPINE CONTRIBUTION

Last year the country produced 1.98 million metric tons and projects 1.85 million metric tons production for 2024, a 15 percent reduction. The continuing El Niño phenomenon bringing droughts since September of last year to this day is the main reason and around 60 percent of the sugar producing provinces complain of the ill-effects of the phenomenon. This is most pronounced in Visayas where most sugarcane is grown and produced. Western Visayas tops all regions in sugar production, and Negros Occidental is the number one sugar producing province with 45-50 percent of the country’s entire sugarcane produced is grown.

Sugarcane remains one of the country’s top agricultural products that contributes to the economy of agriculture’s 20-25 percent chunk to the country’s GDP. The SRA says, this crop year plants sugarcane to an estimated more than 387,000 hectares of sugar land yet our annual production is on a declining trend, having a substantial impact on sectors connected to the industry.

There are around 700,000 workers directly involved in the sugar industry and about 5 million Filipinos indirectly dependent on it which simply means sugarcane as raw material for sugar is an indispensable crop despite its labor-intensive production requirement.

BLOCK FARM STRATEGY

The administrator of SRA pushed for the re-allocation of a P2-B budget this year to promote competitiveness under the Sugar Industry Development Act (SIDA) from 1 billion last year. The budget was reduced due to less spending of a mandated 2 billion annual budget under the law. Another reason is late or delayed approval. Sugar production is a matter of timing to ensure quality and increased volume brought about by climate factors. 

The increase in budget brought to light the block farm program. Mandated under the SIDA law, it aims to reconsolidate land holdings to increase sugar production. And, with the recognition from the government that the sugar industry lags behind other sugar producing countries such Thailand which continuously develops and improves its technology with substantial government support. An imperative.

The block farm program consolidates lands at a minimum of 30 hectares among ARB’s assisted by SRA, DA and DAR with services, technology, and financial assistance to meet minimum requirements of 80 to 100 tons of sugarcane during harvest. For ARB’s, the block farm is one of the best hopes in order not only for the sugar industry to thrive but most importantly for them to develop and sustain this as their main source of livelihood.

NEGROS IS CRUCIAL

There is an evolution and a significant empowerment from their end, but it is not without challenges – now, the economy and environment may have grown exponentially but their capacities have stagnated or at a snail-paced development.

Negros is a crucial player and among sugar planters and producers in the province ARB’s must be indeed competitive with adequate number of workers, good farm equipment and direct leverage and power through the market.*

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February 2024
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