Rafael L. Coscolluela, administrator of the Sugar Regulatory Administration (SRA), said the country is set to export 175,000 MT of raw sugar to the US and to the world market up to Jan. 15.

This is as surplus is expected to have risen to 590,000 to 630,000 MT. However, this surplus is foreseen to decline by the end of crop year (CY) September 2008 to August 2009 through government’s intervention.

"Through the export program we’re adopting, we’re looking at an ending inventory of 400,000 tons," said Coscolluela in an interview.

The projected sugar production this crop year indicates a growth of 8.7 percent from 2.257 million MT in CY 2007-2008.

Sugar Order No. 1 is allocating 10 percent of total sugar production for CY 2008-2009 for the US sugar export quota or 245,000 MT and seven percent for the world market or 171,780 MT. Domestic sugar gets 68 percent of raw sugar production for this crop year and reserve sugar, 15 percent.

Coscolluela said government expects a losing price for sugar farmers from the export market. While production cost is at P950 per 50-kilo bag, US export price is placed at P750 per bag and the world market at a significantly lower price of P600 per bag.

"These are rough figures because we know where to sell sugar, but we’ll sell it at a loss," he said.

Local price of sugar is at a more attractive P1,100 per bag. The country’s sugar production has consistently grown over the last 10 years, except for a few calamity-hit years, with farmers’ increased use of high yielding varieties.

Despite the huge surplus this crop year, SRA projects that the country will experience some imbalance when the Philippines begins implementing the Biofuels Act. The law provided for a five percent bioethanol-gasoline mix starting 2009. While the law does not discriminate on any feedstock for bioethanol, the Philippines is more prepared to use sugarcane for bioethanol feedstock with the upcoming completion of the sugarcane-based ethanol plant of San Carlos Bioenergy in Negros Occidental.

Another company, Leyte Agri Corp. has already started producing bioethanol in Ormoc, Leyte using molasses.