Positioning. That was the key word on every producer's lips yesterday as sugar traders tried to make sure they have the stocks by the end of the milling season. This drove up further the millgate prices of both domestic and US-bound sugar.

Binalbagan-Isabela Planters Association sold its "B" or domestic sugar at P1,195 per Lkg. and "A" or world market sugar, at P1,094.68.

Negros Oriental Planters Association, milling with the Central Azucarera de Bais, posted a bid price of P1,198.68 for its "B" sugar and P1,070.55, for its "A" sugar.

But NOPA producers milling with Ursumco traded their US sugar for P1,080, but accepted a lower price for domestic sugar at only P1,180 per Lkg.

The Department of Labor and Employment, the trendsetter for prices, sold its domestic sugar for P1,130.85 and its "A" sugar for P1,080.23.

La Carlota producers sold their "B" sugar for P1,172.36 per Lkg. and its "A" sugar for P1,090.

Hawaiian Philippines, both AHSSI and APSII, disposed of their domestic sugar at P1,184 and their "A" sugar at P1,091.

Analysts believe that market forces are in full control now of sugar trading, reports said, adding that traders are reportedly bracing for what is perceived as potential tightness of supply by the end of the milling season.

This is hedging against the possibility and striking a bargain hoping that prices will further escalate by that time, reports added.

Domestic prices are comparable to the world market which quoted 15.75 cents per pound as of the last report.

And the prognosis is that prices will go up higher by March, possibly breaching the 16 cents per pound mark even before the previously predicted time frame of March, reports said.

What seems apparent is that sugar production has dropped with the European Union drastically cutting down its subsidies. This reportedly reduced its exportable sugar to only 1.5 million metric tons, a dramatic drop from the previous five million, reports added.

Even Thailand reported production drop. So with China, which started unloading its state reserves to fill up domestic demand, and Brazil that also reported a production dip of as much as three million metric tons due to the premature rains in the South-Central area of that country.

In the United States, food manufacturers and confectionary makers are pressing on the United States Agriculture Department to import more sugar to undo the damage cause by hurricanes Katrina and Wilma, reports said.*RLE

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