Philippines Sugar Market - Forecasts from 2022 to 2027

The Philippines sugar market is expected to grow at a compound annual growth rate of 3.70% over the forecast period to reach a market size of US$1,003.841 million in 2027 from US$778.301 million in 2020.

Market Overview:

The Philippines' sugar industry of today is considerably dissimilar from that of the past. The nation's economy continues to depend heavily on the sugar sector. The majority of the sugar industry's output is currently used to meet the local demands of Filipino producers and consumers. It primarily exports to the American market and seldom engages in exporting to the international sugar market. At the pricing on the international market, the sector is not competitive. In the nation, sugarcane is farmed in 17 provinces across eight different geographic regions, from Mindanao to northern Luzon (Isabela, Cagayan) (Bukidnon, Cotabato, Davao). Western Visayas is the region that produces the most, followed by Northern Mindanao and Central Visayas. The major landowners, millers, distillers, and refineries are the key actors in the sugar sector. The largest sugar producer in the nation and one of the biggest sugar mills and refineries in Asia is Victoria’s Milling in Negros Occidental. According to Victoria Milling (2019), it meets around 30% of the county's daily demand for refined sugar (Source: victoriasmilling.com).

Growth factors:

To stabilize the market; production is limited to domestic use only

Sugar demand increased by 300,000 MT to 2.0 million MT in CY 2021/2022 (Source: Sugar Annual Report, 2021), mainly making up for COVID-19's economic troubles the previous year. As limitations to combat COVID-19 are relaxed, the industry anticipates a resurgence in consumption, which encouraged producers of food and beverages to boost their output and use of sugar. Therefore, this year PH assigned the full year's production of sugar to the domestic market. According to Sugar Order No. 1, all of the commodity's output between September 2022 and August 2023 must be categorized as "B" or for the domestic market. Contrarily, Sugar Order No. 2 permitted a maximum volume of up to 150,000 MT of refined sugar imports. The other half will be set aside for consumer use, with half designated for commercial use.

Restraints:

Due to poor harvests brought on by super typhoon Odette and the la Nia storms, the Philippines sugar market experienced significant supply shocks that made it difficult to meet domestic demand. After a subpar harvest for the 2021-22 crop year, there has been a noticeable shortfall of sugar supplies in the Philippines. According to the Sugar Regulatory Administration (SRA) of the Philippines, local farmers attempted to stop imports in February to defend domestic prices, which further tightened the supply situation. The commodity's price increased as a result, and traders may have manipulated the market by hoarding.

Market Developments:

• June 2020: To assist sugarcane growers impacted by the coronavirus disease 2019 (COVID-19) pandemic, JAPAN decided to donate P377 million. In addition to other items, the funding covered the delivery of farm equipment such as tractors, harrows, whole-stalk sugarcane planters, and mulchers. The award also assisted the Philippine sugar industry in addressing its challenges with productivity and cost.

Market Segmentation:

By Form

• Granulated
• Powdered
• Syrup

By Source

• Cane Sugar
• Beet Sugar

By Use

• Food and Beverage
• Pharmaceuticals

By Distribution Channel

• Online
• Offline