NFSP pushes 100% ‘B’ sugar

Considering the low estimated sugar production for Crop Year 2021-2022, the National Federation of Sugarcane Planters (NFSP) called on the Sugar Regulatory Administration (SRA) to allocate 100% of sugar production as “B” sugar for the domestic market.

NFSP President Enrique D. Rojas relayed the federation’s sentiments in a letter to SRA after receiving a copy of the Pre-Milling Crop Estimate for CY 2021-2022, which starts on September 1 and runs until August 31 of the following year.

“In view of the low estimated sugar production of only 2.1 million metric tons due to La Niňa 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% of sugar production as “B” Sugar for domestic consumption,” stated Rojas 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 Crop Year 2022-2023, if our sugar production exceeds our domestic demand, we are open to the US quota.,” Rojas added.

According to SRA’s Pre-Milling Crop Estimate, the estimated sugar production for the coming crop year is only 2,099,720.71 metric tons, which is slightly lower than the 2,138,147 mt production for CY 2020-2021.

In CY 2020-2021, SRA mandated the 5% 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.

SRA Sugar Order No. 1-A, which was issued on March 29, 2021, eliminated the 5% “A” Sugar 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. This drop in sugar recovery was primarily caused by the La Niňa phenomenon.

Last month, PAGASA issued an advisory that “there is more than fifty percent (50%) chance that La Niňa will develop in either October or November 2021, which may last through the first quarter of 2022.”

The forthcoming La Niňa in CY 2021-2022 is expected to result to low average national sugar recovery of only 1.71 LKG/TC, which is the actual average national sugar recovery for CY 2020-2021 when the industry also suffered from La Niňa. Thus, the estimated production for next crop year is almost the same as production in the current crop year.* (Butch Bacaoco)