Sugar Regulatory Administration chief James Ledesma said he is optimistic that the "La Nina" effect, which will bring heavier rains, will enable planters to produce more despite concerns of its impact to farming.

La Niña brings positive effect to the drying canes as summer nears and wet season brings more tonnage, Ledesma said, adding that it would redound in greater production.

To date, Ledesma said, production has already reached 1.15 million metric tons of sugar, and he is optimistic that the projected 2.018 million is attainable especially with the early onset of rains.

The two percent drop in production, he said, is on track. He also noted a shift of consumer-buying to raw, or the "cheaper sugar."

Ledesma also disclosed that exporters had already shipped out 25,000 metric tons of sugar in the United States. The next outward shipment will total something like 100,000 MTs, he said.

He said that millgate prices of sugar have climbed back to P1,200 parity with the prevailing world price of sugar.

Ledesma pointed out, however, that the drastic jump of prices to P1,450 two weeks ago was "abnormal" and the Departments of Trade and Industry and Agriculture saw manipulation behind it especially with the entry of non-traditional players in sugar-buying.

"The SRA is not against high prices because it is beneficial to the producers. But we are also concerned with the consumers," he said.

The strong market fundamentals, he added, is the reason why millgate prices are rising with acceptable variance.

At present, domestic prices have reached parity with world sugar prices. "Lower than that, there will be no importers to bring sugar for profit," he said.

Ledesma said SRA envisions a possible P1,250 per Lkg. price for sugar millgate. In short, what could possibly happen is that retail price will hover between P40 to P41 per kilogram.

Looking at the future of sugar prices, he said that P1,150 to P1,250 fundamental parity is likely sustainable as indicators point to further increases. On the impact of Value Added Tax on sugar prices, Ledesma said that it is only minimal, "maybe just 2 percent or somewhere about 25 centavos per bag."*RLE

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