Philippine Sugar Stockpiles Rise 30% After State Pares Exports

By Luzi Ann Javier

Feb. 26 (Bloomberg) -- Stockpiles of raw sugar in the Philippines, Southeast Asia’s second-biggest exporter of the sweetener, climbed 30 percent this month after the government curbed overseas sales.

Reserves rose to 733,080 metric tons on Feb. 1 from 565,385 tons a year ago, according to a preliminary report from the Sugar Regulatory Administration obtained by Bloomberg News today.

“We’ll decide whether to allow exporters to ship sugar from the reserves after April,” Sugar Regulatory Deputy Administrator Aida Ignacio said in an interview in Manila today. Sugar milling reaches its highest point in April.

Mounting stockpiles may prompt the government to release the excess supply in the global market to prevent a slump in domestic prices that may discourage planters from boosting cane production. That may rein in a rally that’s made raw sugar the world’s best performing agricultural commodity this year.

Raw-sugar futures prices have gained 14 percent this year in New York amid forecasts India, the second-biggest producer, may become a net importer for the first time in three years. Futures for May delivery rose 2.2 percent to 13.42 cents a pound on the ICE Futures U.S. in New York yesterday.

In the Philippines, the average price of raw-sugar was 29.92 pesos (62 cents) per kilogram on Feb. 16, from 30.24 pesos on Jan. 26, according to the Sugar Regulatory Web site.

Export Allocation

The government earlier this month lowered the allocation for exports to markets outside the U.S. to 2.5 percent of the weekly production from 7 percent in September, to build stockpiles. The allocation was pared after the government cut its annual output forecast to 2.03 million tons.

Output from Sept. 1 through Feb. 1 was little changed at 1.1172 million tons, from a year ago, prompting officials to raise the full year forecast to 2.175 million tons.

Still, the government will wait until after milling peaks in April before deciding to ease exports or release reserves into the domestic market.

The Southeast Asian nation, which supplies to the U.S. and other markets, produced 2.45 million tons in the crop year ended Aug. 31. That’s the highest output in 25 years.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net