Manila, Aug 27 - Philippine sugar output for the next crop year starting September is expected to drop about 8 percent from a 24-year high amid higher costs of fuel and fertiliser, a senior official said on Wednesday.
But Rafael Coscolluela, head of the government's Sugar Regulatory Administration (SRA), said the country hopes to increase exports using surplus sugar from the current crop, and encourage sugarcane growers to plant more given the expected rise in use of the biofuel ethanol. Estimated sugar production for 2008/09 is 2.257 million tonnes, down from 2.455 million tonnes in the current crop year that was the highest output since 1983/84, Coscolluela told Reuters in a telephone interview. He said the high costs of fuel and fertiliser as well as the static domestic prices of sugar for almost a year have been discouraging farmers from growing more cane.
The Southeast Asian nation exported 137,000 tonnes of sugar, or nearly 6 percent of total output for 2007/08, to the United States under a quota programme in which the U.S. buys the sweetener at prices above levels in the global market.
Another 16,783 tonnes were shipped to other markets like Dubai and Hong Kong, Coscolluela said.
"We're looking at the possibility of further exports in the range of 100,000-150,000 tonnes excluding U.S. quota over the next six months," he said.
The SRA chief was optimistic that a law mandating an increase in the use of locally-sourced biofuel ethanol from next year will mean bigger business for sugarcane growers.
"The outlook for Philippine sugar will not be good (unless) sugarcane becomes a feedstock for both sugar and ethanol and other by-products as well. It will broaden the industry's revenue base," he said.
The Philippine Biofuels Act, passed in 2006, mandates a 5 percent locally-sourced ethanol blend in gasoline products in 2009, to be hiked to 10 percent in 2011. Coscolluela said local sugar production will remain volatile over the next two years until the ethanol programme takes off.
"The ethanol programme will provide a bigger market for cane, not just here, but worldwide we're anticipating that prices will improve in about two to three years time.
"For the meantime, we have to do some belt tightening."