Sugar shortage hits the Philippines as food inflation woes mount

·2 min read
A vendor arranges repacked sugar on sale on a table at a public market in Taguig City Metro Manila August 27, 2008. REUTERS/Cheryl Ravelo (PHILIPPINES)
A vendor arranges repacked sugar on sale on a table at a public market in Taguig City Metro Manila August 27, 2008. REUTERS/Cheryl Ravelo (PHILIPPINES)

By Cecilia Yap

The Philippines has warned of a worsening sugar shortage, as it struggles to control surging prices of the sweetener in a country already battling soaring food costs.

The nation missed its sugar production target following extreme weather events that damaged crops and after high fertilizer prices reduced yields. Imports have also been delayed, exacerbating the supply crunch.

“Now the prices have gone out of hand and there is this situation that we are about to run out of sugar,” Sugar Regulatory Administrator Hermenegildo Serafica said in a statement. The government will likely import more of the commodity, he said.

Food inflation in the Philippines quickened in May, jumping 4.9% as overall consumer prices rose the fastest in more than three years. Food costs could spike further, with Nomura Holdings Inc. estimating a 6.9% increase in the second half of this year.

The surge in staple food products is likely to be a key challenge to President-elect Ferdinand Marcos Jr., who took the unusual step of appointing himself the agriculture secretary to take direct responsibility over farm output.

“It’s important that the president take that portfolio not only to make it clear to everyone what high priority we put to the agricultural sector, but also as a practical matter, so that things move quickly,” Marcos said earlier this week.

The government will likely import more sugar to address a projected shortfall of 43,000 tons by the end of August, Serafica said. Demand has already outpaced the expected shipments that would have been used as carry-over stock, he added.

Retail prices of sugar have surged to 65.82 pesos ($1.21) per kilogram in April this year, up from 53.37 pesos the same time last year, according to the United States Department of Agriculture.

The Southeast Asian nation will likely miss its production target for the crop year ending August after a super typhoon and the La Nina weather pattern curbed yields, the Philippine sugar agency said last week.

Production reached 1.8 million tons as of mid-June, less than the 2.07 million tons estimate in February. Demand for the past three crop years has been around 2.03 million tons.

A court order delayed some 200,000 tons of sugar imports, and that’s also to blame for the shortage, Serafica said. In February, a group of sugar producers said the imports were poorly timed as they would depress prices planters can fetch for their crops, BusinessWorld reported.

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