CANE POINTS: Sugar prices heading for a rebound?

The start of Year 2025 seems to bode well for sugar farmers, as prices ranged from P2,605 (Biscom) to P2,700 (Hawaiian-Philippine Company) per bag during the first bidding of the year. This is a big improvement from the anemic December average monthly price of P2,486.63, brought down by the lowest weekly average so far for Crop Year 2024-2025 of P2,406.26 in the last week of bidding for 2024.

Hawaiian, the traditional trendsetter with the highest bid results, reported prices of P2,751.01 and P2,825.55 in the second and third bidding weeks, respectively. SRA’s average for the first two weeks of January is P2,643.02. The average of last week’s bidding is not yet posted at the SRA website as of this writing.

The P2,825.55 Hawaiian price last week almost reached the highest weekly average of P2,827.85 in the third week of October last year. Sugar farmers hope that Hawaiian’s upward trend continues, looking forward to prices approaching P3,000 per bag.
Are sugar prices heading for a rebound?

As sugar farmers wait with an equal mix of expectation and trepidation for the results of this week’s bidding, they might as well take time to review the current sugar supply and demand situation which might give a glimpse of what might happen in this week’s bidding.

Starting balance for raw sugar in the mills is 272,005 metric tons, almost two times higher than the 184,815 mt last crop year.

Refined sugar starting balance is 308,518 mt, consisting of 230,826 mt mill production and 77,692 mt balance from refined sugar imports (spillover from the massive importation of approximately 750,000 mt refined sugar two years ago). This is lower than last crop year’s starting balance of 572,501 mt, consisting of 409,500 mt imported sugar and only 142,051 mt locally produced refined sugar.

Raw sugar production, based on SRA Sugar Supply & Demand Situation Report as of January 12, 2025 (the latest available), stands at 617,654 mt (37.56% lower than 898,131 mt production for the same period last year). Together with the raw starting balance of 272,005 mt, total raw supply amounts to 889,659 mt, (24.60% lower than last year’s 1.18 million).

Total raw sugar demand (all domestic withdrawals) registered at 544,357 mt, 5.36% lower than the 575,189 mt total demand (including 4,825 mt import withdrawals) last year.

Raw sugar balance at millsite stands at 345,302 mt (is 42.79% lower than the 603,582 mt last year). A total of 63,590 mt were withdrawn for refining, which is 60.59% lower than the 161,361 mt withdrawn for refining last year. Withdrawals of raw sugar for refining reflects demand for locally produced refined sugar.

Deducting raw sugar withdrawn for refining leaves 281,712 mt total physical sugar stocks as of January 12, 2025. This figure is 34.56% lower than the 443,371 mt stocks last year.

Refined sugar production as of January 12, 2025 registered at 138,189.50 mt (54.53% lower than 303,923.40 mt last year). Add to that the 211,241.12 mt importation under Sugar Order No. 5 (CY 2033-2024) and the refined starting balance of 308,518 mt, total refined supply stands at 657,949.52 mt (28.25% lower than last year’s 917,049.90 mt, which includes 1,575 mt refined sugar imports).

While refined sugar demand for domestic use increased by 41.76% to 235,805.50 mt compared to last year’s 166,345.75 mt, the total demand for refined sugar dropped 8.82% to 353,908.30 mt (including 118,113.25 mt withdrawals of imported refined) from last year’s 388,170.75 mt (including 221,825 mt withdrawals of imported refined).

Refined sugar balance at the refineries stands at 133,211.35 mt (52.36% lower than last year’s 279,629.15 mt), while balance of imports stands at 170,819.87 mt (31.47% lower than last year’s 249,250 mt), bringing total refined sugar stocks to 304,031.22 mt (42.51% lower than last year’s 528,879.15 mt).

Although domestic demand for refined sugar increased 41.76%, it should be noted that demand for local refined last year was low because the market was awash with imported refined.

Crop Year 2023-2024 started with a spillover of 409,500 mt imported refined sugar. Thus, the substantial drop in refined sugar balance (52.36%) and total refined sugar stocks (42.51%) should be viewed with this in mind.*