Bacaoco: CY '08-'09 production in review

DURING the Philsutech 56th Annual National Convention at Waterfront Hotel in Lahug, Cebu City last week, the National Federation of Sugarcane Planters headed by Enrique D. Rojas took the opportunity to gather its members for a get-together at Casino Español.

An appetizer to the sumptuous dinner was a presentation of different topics that affect the industry to sugar producers.

Foremost among the topics were the status of the sugar industry and insights on the coming crop year. The other topics were updates on the industry's anti-smuggling endeavors and salient points on the new CARPer law.

Sugar Board member and Philippine Sugar Millers Association executive director Archie Amarra and Sugar Master Plan Foundation officer-in-charge Giac Alonso provided inputs on what is happening in the sugar industry. With them was newly designated executive director of Sugar Master Plan Foundation Sput Monasterio.

Highlights of the presentation are: raw sugar production for CY '08-'09 dropped almost 15 percent to only 2.09 million mt as of July 26 compared to 2.45 million mt last crop year. Raw sugar withdrawals reached 2.03 million mt, an increase of 9.37 percent, compared to 1.86 million last crop year. The increase in CY '08-'09 production and withdrawals resulted in a smaller raw stock balance of only 291,773 mt compared to last crop year's 519,825 mt.

On the other hand, refined sugar production decreased by 10.29 percent from 1.06 million mt to only 960,417 mt. Withdrawals spiked by almost 7 percent from 901,359 to 960,417 for CY '08-'09. Refined stock balance also dropped to 283,407 mt from 345,698 mt last crop year.

Gross ton canes milled dropped almost 20 percent nationwide from 26.76 million mt to 21,481 mt but this was somehow compensated by an improvement in LKg/TC of 1.95 compared to only 1.84 last crop year.

In terms of percentage, Panay registered the biggest drop in production at 32 percent followed by Eastern Visayas at 25 percent. Negros registered the lowest drop at only 12.9 percent. However, in terms of actual volume, Negros marked the largest decrease of 174,386 mt, from 1.35 million mt to only 1.18 million mt this crop year. Mindanao's production dipped by 71,080 followed by Panay's 64,630 mt and Luzon's 44,793 mt.

Except for Batangas, all mills in Luzon posted a negative growth rate. The cane tonnage of Luzon's largest producing mill, Don Pedro, dropped 28 percent from 2.03 million mt to only 1.47 million mt.

Despite a dramatic improvement in Don Pedro's LKg/TC from 1.61 to 1.84, its raw sugar production still dropped a substantial 17 percent from 163,515 mt to only 135,100 mt.

Panay and Eastern Visayas mills dropped 32 percent and 29 percent, respectively, in their raw sugar production while Mindanao mills dropped 14 percent. Busco, Mindanao's largest producer, dropped 10 percent from 247,299 mt to 222,230 mt.

Here in Negros, the biggest producer is Vicmico with 284,334 mt, even though this reflects a 16 percent drop from last crop year's 340,232 mt. Vicmico's cane tonnage dropped 20 percent, from 3.35 million mt to only 2.68 million mt this crop year but its LKg/TC improved from 2.03 to a phenomenal 2.12.

Biscom logged the second largest production in Negros at 170,147 mt, a 10 percent drop compared to last year's. The decrease could have been higher but, due to high transport cost, producers in southern Negros who normally mill in northern Negros opted to mill in Biscom, which is substantially nearer to save in transport cost.

La Carlota produced 161,261 mt, which is 8 percent lower than the previous crop year. Lopez dropped 21 percent to only 121,643 mt compared to 154,232 last crop year. Hawaiian produced 110,085 mt, which is also 8 percent lower than the previous crop year's 119,253 mt.

Vicmico and Hawaiian's recovery of 2.12 LKg/TC is the highest all over the country. Busco and Crystal come second at 2.06 LKg/TC but, overall, Negros and Mindanao mills have the highest LKG/TC among other sugar producing areas.

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According to the International Sugar Organization, world raw sugar prices will hover between US$ 20 to 25 US cents per pound (P1,056 to P1,320 per Lkg at P48 to the dollar) for the rest of the year.

This is also higher than the US$ 19 cents estimate based on a mid-year survey conducted among commodities experts.

Sugar for October delivery was traded last week at US$ 23 cents, an almost three decades high, prompted by India's import needs for the coming crop year. India, the world's largest sugar consumer, might import between 3 million to 4 million mt for CY '09-'10 due to a projected shortfall in its production.

At current world sugar prices, the smuggling of sugar into the country will no longer be profitable. However, if world sugar prices become much higher than domestic prices, it will give rise to another problem, which is reverse smuggling or the smuggling of sugar outside of the country to the much more lucrative world market.


Source:sunstar