The sugar shortage in the Philippines has intensified as local production fell short of expectations and planned imports of up to 200,000 tonnes of the refined sweetener were delayed, according to the Sugar Regulatory Administration (SRA) on Wednesday.
The shortage, which has kept sugar prices high for months, adds to the Philippines' inflationary pressures, with consumer prices rising at the fastest rate in more than three years in May due to high fuel and food costs.
The SRA cited crop damage from a powerful typhoon that hit plantations in December, as well as unfavorable weather conditions.
"Prices have exploded, and we are on the verge of running out of sugar," SRA Administrator Hermenegildo Serafica said in a statement.
According to the government agency, raw sugar output in the crop year ending Aug. 31 is now expected to be 1.8 million tonnes, down from a previous estimate of 1.98 million tonnes and compared to an average annual demand of 2.03 million tonnes in the previous three crop years.
While there are no signs of panic buying or stockpiling in the local market, the shortage and rising sugar prices will be major challenges for President-elect Ferdinand Marcos Jr, who will take over the Department of Agriculture when he takes office on June 30.
To make up for the shortfall, the SRA announced in February that it had confirmed the importation of 200,000 tonnes of standard and bottler's grade refined sugar. However, the plan was put on hold after a local sugar producers' group filed a court restraining order.
The Philippines does not regularly import sugar, but when it does, it usually purchases from Thailand.
Thailand, the world's second-largest sugar exporter, is said to be hoping to secure the majority of the deals to supply the Philippines with cheaper imported sugar.
Sugar Order (SO) No. 10 was issued by the Sugar Regulatory Administration (SRA) ordering the importation of 100,000 metric tons (MT) of bottlers' grade refined sugar, 50,000 MT of standard grade refined sugar, and another 50,000 MT of raw sugar for domestic tolling or direct consumption.
It will be the first time in more than two years that Filipino traders and millers will be permitted to import sugar from other countries.
According to an SRA official, the Philippines will most likely obtain these new stocks from Thailand, owing to previous agreements the country had with them regarding sugar imports.
Thailand is expected to export between 7 million and 11 million MT of sugar this year.
According to US Department of Agriculture (USDA) data, Thailand's sugar production for market years (MY) 2017 to 2018 and 2018 to 2019 is expected to reach a record 13 to 14 million MT.