Raw sugar production in the Philippines is projected to decline in the next marketing year as dry conditions linked to El Niño weigh on cane yields, according to the United States Department of Agriculture (USDA).

In a report dated 29 April, the USDA said output for marketing year (MY) 2026 to 2027 may fall to 1.93 million metric tons, down from an estimated 1.95 million MT in the current crop year. The next MY runs from October to September.

The agency attributed the expected contraction to below-normal rainfall and higher temperatures associated with El Niño, which could persist through the latter part of the year.

El Niño between June and August

Data from Philippine Atmospheric, Geophysical and Astronomical Services Administration show a 79-percent probability that El Niño conditions will emerge between June and August.

Dry weather typically accelerates cane maturity, resulting in lower volumes and reduced sugar content, while also raising the risk of early mill closures, the USDA said.

The outlook comes amid warnings of a potentially stronger El Niño episode, which could further strain water resources and agricultural output.

With production seen easing, domestic ending stocks may decline by nearly seven percent to 704,000 MT in MY 2026 to 2027 from an estimated 753,000 MT this year.

Early mitigation measures could help

The USDA noted that early mitigation measures could help cushion the impact. Agriculture Secretary Francisco Tiu Laurel Jr. has ordered agencies under the Department of Agriculture to prepare for worst-case scenarios, warning that the combined effects of El Niño and higher energy costs could pressure food supply, drive up prices, and weigh on economic growth.

Structural constraints are also limiting output. The USDA said sugarcane area is unlikely to expand due to land conversion, with harvested area projected to remain at 400,000 hectares. Cane output is forecast to slip to 24.3 million MT from 24.5 million MT.

Demand expected to rise

Despite lower production, demand is expected to rise. Sugar consumption is projected to increase to 2.25 million MT from 2.2 million MT, driven by population growth and higher demand for processed food products. Industrial users account for about half of total demand, followed by households and institutional buyers.

To fill the gap, the USDA expects the Philippines to import around 300,000 MT of refined sugar in the upcoming MY. No exports are currently projected, pending export guidelines from the United States, the country’s sole market for raw sugar shipments.