CANE POINTS: Are sugar prices seeking equilibrium?

Millsite sugar prices have slightly softened this March, compared to February’s average monthly price of P2, 910.05 per bag. Sugar prices for Crop Year 2024-2025 breached the P3k mark in Week Ending February 9 at P3,020.50 per bag in Hawaiian, followed closely by Biscom and URC with P3,018.93 and P3,018.38, respectively, and First Farmers at P3,005.10.

The following week, URC surprisingly reported the highest price at P3,030.00, surpassing traditional trendsetter Hawaiian’s P3,028.88. First Farmers remained in the P3k bracket with P3,001.04.

February’s last bidding saw prices slide to P2,700.00 (Casa-Iloilo) to P2,925.25 (Hawaiian), with the same price range maintained in the first two weeks of March. Last week, prices ranged from P2,730.00 (Casa) to P2,903.50 (Hawaiian).

These price movements hardly affected retail sugar prices in Metro Manila’s wet markets. From November 2024 to February 2025, average retail prices remained at the range of P74.70 to P74.37 per kilo for raw, P77.21 to P77.45 for washed and P83.60 to P82.91 for refined. In March, average retail prices on March 14 increased slightly to P76.31 for raw, P78.69 for washed and P83.46 for refined.

Last February 20, Sugar Regulatory Administrator Paul Azcona gave sugar farmers some information on the dynamics of sugar pricing.

“The threshold in prices is maybe at P3,000 to P3,100 per bag, which will not affect the retail price. Anything over that, the retail prices will go up. Retail prices kicked up in 2022 because our farmgate price was at P3,800. Refined sugar at that time in the market was P40 to P50 per kilo, which kicked up to P120 to P130 retail. We had no choice (but to import to lower retail prices),” the Administrator said.

Azcona further explained that, if millgate prices become too high, it will cause a spike in retail prices, forcing government to step in and order massive importation to bring down retail prices.

Ultimately, sugar prices will be dictated by supply and demand.

Based on SRA Sugar Supply & Demand Situation Report for Week Ending March 9, raw sugar production is down 22.47% to 1,259,462 mt from 1,654,508 mt for the same period last crop year. Even with the beginning balance of 272,005 mt imported sugar, total raw supply amounted to only 1,531,467 mt, down by 15.64% from 1,815,298 mt for the same period last year.

Refined sugar production registered at 342,537.25 mt, down by 33.49% compared to 515,001.75 mt last year. Total refined supply reached 870,036.27 mt, including imports from Sugar Order No. 5 2023-2024 and carryover stocks from the previous crop year, but supply is still down 22.96% compared to 1,129,378.25 mt last year.

It can be recalled that, at the start of CY 2024-2025, the mills still have a large beginning stock of 230,826.90 mt domestic refined, because demand for local refined in CY 2023-2024 was displaced by the over importation of refined sugar in CY2022-2023. This massive importation spilled over to CY 2023-2024, such that there was still 77,692 mt imported refined stocks remaining at the start of CY 2024-2025.

Though total refined supply is down about 23% compared to last year, it should also be considered that CY 2023-2024 refined stocks were abnormally high because of the over importation in CY 2022-2023.

On the other hand, demand for raw sugar is down by 11% to 890,617 mt, compared to 1,000,648 mt last year, while demand for refined sugar is also down by about 4% at 536,393.55 mt, compared to 558,449.85 mt in the same period last year.

Out of the 536,393.55 mt refined sugar demand, only 344,880.30 mt (64%) were sourced from locally-produced refined sugar while the remaining balance of 191,513.43 mt (36%) refined demand was supplied by imported sugar.

Total physical stocks of raw sugar reached 518,170 mt, down 15.44% compared to 612,779 mt last year. As for refined, total physical stocks registered at 333,642.72 mt, consisting of 228,483.85 mt domestically produced and 105,158.87 mt balance from imported refined sugar. Total refined stocks as of Week Ending March 9 is down by 41.56%, compared to 470,928.40 mt during the same period last crop year.

To recap the comparison between Week Ending March 9 data with the same period last crop year, raw sugar production is down 22.49%, supply is down 15.64%, demand is down 11% and raw physical stock is also down 15.44%.
As to refined sugar, production is down 33.49%, supply is down about 23%, demand is down 4% and physical stock down 41.56%.

The key indicators are all down for raw and refined sugar, but remember that CY 2023-2024 figures were abnormally bloated by the massive over-importation of refined sugar. This factor has to be considered to arrive at a balanced appreciation of SRA’s data.*