Considering the low estimated sugar production for Crop Year 2021-2022, the National Federation of Sugarcane Planters called on the Sugar Regulatory Administration to allocate 100 percent of sugar production as “B” sugar for the domestic market.
NFSP president Enrique Rojas relayed yesterday the sentiments of the federation in a letter to SRA after receiving a copy of the pre-milling crop estimate for CY 2021-2022, that will start September 1 and run until August 31 next year, a press release from NFSP said.
“In view of the low estimated sugar production of only 2.1 million metric tons due to La Niña this CY 2021-2022, coupled with the expected rise in domestic demand arising from the forthcoming electoral exercise next year, we strongly recommend that SRA should allocate 100 percent of sugar production as “B” Sugar for domestic consumption,” Rojas said in his letter to SRA Administrator Hermenegildo Serafica.
“We value our access to the US market. However, we have barely enough for our domestic consumption for Crop Year 2021-2022. In CY 2022-2023, if our sugar production exceeds our domestic demand, we are open to the US quota,” Rojas added.
The SRA pre-milling crop estimate showed that the estimated sugar production for the coming crop year is only 2,099,720.71 metric tons, slightly lower than the 2,138,147MT production for CY 2020-2021, the press release said.
In CY 2020-2021, SRA mandated a 5 percent allocation for “A” Sugar (US Market) at the start of the crop year, and then eliminated the “A” sugar allocation near the end of the milling season.
The “A” sugar allocation caused losses to sugarcane farmers, because “A” sugar prices are lower than “B” sugar prices, it said.
SRA Sugar Order No. 1-A, issued on March 29, 2021, eliminated the 5 percent “A” allocation because of the drop in estimated production due to the decrease in average national sugar recovery from the projected 1.87 LKG/TC to only 1.71 LKG/TC. The drop in sugar recovery was primarily caused by the La Niña phenomenon.
Last month, PAGASA issued an advisory, saying that “there is more than 50 percent chance that La Niña will develop either in October or November 2021, and may last through the first quarter of 2022.”
This is expected to result in low average national sugar recovery of only 1.71 LKG/TC, that is the actual average national sugar recovery for CY 2020-2021 when the industry also suffered from La Niña. Thus, the estimated production for next crop year is almost the same as production in the current crop year, the press release said.
It added that the SRA is set to hold an online meeting with industry stakeholders to discuss the preliminary production estimate and the proposed sugar allocation for CY 2021-2022.*