Low sugar prices hurting farmers

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The Philippines’ sugar production is projected to remain flat next year, even as farmers face declining mill site prices due to the commodity’s stable supply, according to the United States Department of Agriculture (USDA).

Based on its Sugar Annual report for the Philippines, USDA’s Foreign Agricultural Service (FAS) estimated that local raw sugar production will stand at 1.85 million metric tons (MT) for marketing year (MY) 2026, which would begin in September this year and conclude the following August.

“Farmers will continue to plant sugarcane despite the downward trend of mill site prices in MY 2025 in anticipation of increases in MY 2026,” the report said.

Under the current crop year, mill site prices are expected to continue their downward trend until the beginning of the next crop season in August.

Data from the Sugar Regulatory Administration (SRA) showed that the mill gate price is averaging around ₱2,734 per 50-kilogram (LKg) bag this year.

Given that this figure is only as of March, it is uncertain whether it will surpass or fall short of the average ₱2,580 per LKg recorded in the previous crop year.

Nonetheless, the latest data suggest that current prices are a significant drop from MY 2023, when the average price reached ₱3,177 per LKg.

USDA-FAS noted that sugar planters are taking a substantial hit from low sugar prices, as rising costs in labor, power, fuel, and fertilizer further strain their income.

The US agency’s stable projection in sugar production next year is the exact forecast it issued for the current crop season, which is at 1.85 million MT.

Last year, it cited high mill site prices as the factor behind the raw sugar production estimate for MY 2025, despite the El Niño phenomenon that upended the output of most agricultural commodities.

Although sugar prices are lower this year, USDA-FAS said MY 2026 will sustain stable production due to favorable weather conditions during the planting period.

“Ample rainfall during the planting season which started in October supported sugarcane planting among farms with no irrigation,” it said.

The current planting season ends in May.

In particular, rainfall in recent months supported major sugarcane areas in the provinces of Negros Occidental, Bukidnon, and Batangas, as well as Panay Island.

These areas, according to the report, are expected to remain flat at 389,000 hectares (ha).

It stressed that conversion of agricultural land—fueled by residential and industrial developments—is limiting potential expansion for sugarcane planting.

The SRA, which oversees the country’s sugar industry, has forecast 1.78 million MT in sugar production this crop year due to the prolonged effects of El Niño last year.

As of March 23, it reported that raw production stands at around 1.4 million MT.

More imports seen

USDA-FAS is expecting the Philippines to import about 300,000 MT of refined sugar—equivalent to 321,000 MT of raw sugar—next crop year as indicated by recent SRA orders.

“Sugar imports will continue to stabilize supply and prices in the domestic market,” the report read.

It specifically cited Sugar Order (SO) No. 2, released in February, and SO 5, issued last month.

Under SO 2, the government authorized eligible traders to purchase as much as 500,000 MT of local raw sugar at a premium price to avail of a slot in the government’s sugar importation program.

This move was seen to “maintain an optimum sugar supply for domestic consumption while ensuring reasonable and stable prices.”

Meanwhile, SO 5 outlined the guidelines for the export of 66,000 MT of raw sugar to the US. This is part of the country’s obligation under the US raw sugar tariff-rate quota world trade allocation.

USDA-FAS is expecting no additional exports for the coming crop year “at this time.”