Sunset for sugar?

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February 23, 2026 | 12:00am

The sun is setting on the Philippine sugar industry but our government refuses to acknowledge it, delaying efforts to transition the poor workers who are dependent on it.

In a recent issue, The Financial Times reported that sugar prices have tumbled to their lowest level in more than five years as weight-loss drugs accelerate a drop in demand by pushing consumers to ditch sweet treats in favor of protein.

“Raw cane sugar futures in New York dropped to less than 14 cents a pound, the lowest since October 2020 and less than half the level they hit in late 2023. Traders say the move reflects a sharper than forecast slowdown in consumption in the US and other wealthy economies, while demand in developing countries is growing at a slower pace than expected.”

Welcome to the new world of Ozempic and other so-called GLP-1 weight-loss drugs — which reduce cravings for sweet flavors.

GLP-1s are the basis of medications including Novo Nordisk’s Wegovy and Ozempic and Eli Lilly’s Mounjaro and Zepbound.

“The drop in consumption, or the speed of it, has taken the [sugar] industry unaware,” the Financial Times quotes Gurdev Gill at broker Marex.

Quotes the FT: “While sugar consumption in developed markets has been edging lower for years as people increasingly opt for healthy snacks, with these peptides now it feels like the more developed markets have really seen a large sea change in consumption.”

The demand for GLP-1s has been driven by consumers battling obesity and diabetes. Some of these are already available in the Philippines but are still rather expensive. But generics can reduce costs by 70 percent.

Even before we entered the Ozempic Age, consumers have started to cut back on their sugar consumption. That’s why there is Coke Zero and many products advertise “no sugar added.”

It was stupid of some sugar regulatory officials to propose imposing high tariffs on non-sugar sweeteners to force soft drinks and candy manufacturers to boost demand for domestic natural sugar. Consumer preference for non-sugar sweeteners is something even Coke cannot ignore.

Besides, our government has made serious mistakes in trying to save the sugar industry by remaining captive to the traders and planters who influence official decisions.

Based on apparently bad data, the Sugar Regulatory Administration over-imported sugar in the last three cropping seasons as favored traders brought in 1.5 million metric tons of refined sugar, more than double the normal buffer stock level.

The excess inventory brought the domestic prices of sugar, from the farms and the mills, at historic lows. But the SRC favorites still earn windfall profits by selling retail at no less than P80 a kilo.

Health is one more reason Filipino consumers should start ditching cane sugar in their diets. We have a sweet tooth and that explains rising cases of obesity and diabetes.

Diabetes is considered a major killer and a serious public health crisis in the Philippines, consistently ranking as one of the top five leading causes of death. 

Experts have noted an increase in type II diabetes among adolescents. It is a major cause of complications such as chronic kidney disease, cardiovascular diseases and blindness. No wonder we are seeing so many dialysis centers all over the country.

That’s why sweetened food products are paying “sin” taxes together with tobacco and alcohol. Those who insist on using products determined detrimental to their health must help pay some of the costs of subsequent health care required.

It makes no sense trying to keep alive an almost dead industry through subsidies and protectionist measures. The government must start making hard decisions to transition the workers in the sugar fields into doing something else for a living.

Our sugar industry is hopelessly inefficient. Our production cost of 34 centavos per pound is nearly double the current global market price of roughly 16.5 centavos per pound. This means our sugar industry can’t exist without government protection. Worse, our sugar policies punish the consumers with high domestic retail prices.

Philippine sugar farms have significantly lower productivity compared to Vietnam and Thailand. As of the 2024–2025 season, Vietnam leads the region with 6.69 tons of sugar per hectare, while the Philippines lags behind with only 4.62 tons per hectare, also behind Thailand. The Philippines faces declining yields and low milling efficiency compared to Thailand.

 Productivity in our sugar lands is hindered by fragmented landholdings, insufficient modernization/mechanization and lack of investment compared to regional peers.

To survive this “Ozempic era,” experts suggest a multi-pronged transition from being a producer for table sugar to pivot toward non-food uses for sugarcane to decouple its survival from declining sweetener demand.

But forget bioethanol and energy. The Philippine bioethanol program is a big failure because local production costs 34 centavos  per pound or nearly double the global price, making domestic ethanol uncompetitive against imports from the US and Brazil.

Domestic bioethanol supply is insufficient and too expensive. It raises gasoline pump prices too. We should end this program now because it only drains foreign exchange to benefit the Americans and the Brazilians at the expense of Filipino motorists.

There are suggestions to shift to high-value exports like organic muscovado. Its price is driven by retail trends in health-conscious markets like Europe and Japan, where consumers pay a high premium for its unrefined, mineral-rich profile. But it is a niche product.

For millions of small-scale farm workers, shifting away from sugarcane entirely may be necessary.

There are suggestions to encourage transitioning to more profitable crops like cacao, coffee, mushrooms or fruits.

Some old-time producers claim they need protection for food security. But sugar isn’t really an essential food like rice. Then they warn that the sugar industry still forms a large voting bloc. That’s the threat paralyzing government decision-makers.

The government must recognize that the game is clearly over for our sugar industry and launch a program to help farmers navigate a transition to other crops and means of livelihood.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco