Monday, 29 June 2009

Philippines may boost sugar exports next year

Manila Standard

The Philippines, Southeast Asia’s second-biggest sugar exporter, may increase overseas sales by 18 percent next year, helping narrow the deficit in global supply and likely slowing gains in world prices of the commodity.

Exports may rise to 250,000 metric tons in the crop year beginning Sept. 1, from 211,758 tons a year earlier, as output expands, Sugar Regulatory Administrator Rafael Coscolluela said in a phone interview yesterday.

Raw-sugar prices in New York jumped to the highest since May 2006 Thursday on signs that a supply shortfall may extend into a second year. The deficit in the year starting Oct. 1 may total 2.5 million tons, compared with 4.7 million tons in the current marketing year, commodity futures brokerage FCStone Group Inc. forecast last week.

Additional supplies coming from the Philippines will “definitely” help damp prices, Ben Barber, a commodities broker at Bell Commodities Ltd. in Melbourne, said by phone yesterday. “The people who are growing this stuff are going to be quick to sell it on the back of higher prices.”

Raw-sugar futures for October delivery fell as much as 1.2 percent to 17.49 cents a pound on ICE Futures US in New York Friday, snapping five days of gains. The contract traded as high as 17.73 cents Thursday, the highest for a most-active contract since May 12, 2006.

“With an improvement in global prices, it will be easier on producers when we suggest that we should export our surplus,” Coscolluela said.

The Philippines consumes 1.95 million tons of sugar a year from local supplies and exports surplus production, Coscolluela said. The country’s Sugar Regulatory Administration sets a quota for exports to protect domestic supplies and stabilize prices.

Production may rise to at least 2.2 million tons next year, from 2.1 million tons in the year ending Aug. 31, as cheaper fertilizers enable farmers to boost yields, said Coscolluela. Fertilizer prices, which account for about 30 percent of production costs, have halved from a year earlier, he said.

Thailand, the world’s second-largest sugar supplier, may also raise production this year as higher prices and adequate rain increase plantings, Mitr Phol Sugar Corp Ltd., the nation’s biggest mill, said last month. Khon Kaen Sugar Industry Pcl., the country’s biggest publicly-traded miller, said Thursday it plans to almost double output to gain from rising prices.

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