In a study conducted by the Philippine Development Assistance Programme (PDAP) in 2005, it was shown that cane cultivators had three choices when it came to having their produce processed. The first was to have it processed into refined sugar. The next was processing this into muscovado, and the third was a ratio between the two.
Another finding in the study is that although Philippine muscovado in general has good quality it still doesn’t meet some standards which may hamper its prospects in the international market. Most important of the steps to improve the quality is to upgrade the mills. Most of the muscovado mills in the country are motor driven while some still use carabaos. Currently the most modern mill is located in Negros Occidental owned by Alter Trade Manufacturing Corporation.
The government has exerted efforts in helping upgrade the quality of mills by extending loans to upgrade facilities and buy modern equipment. Emphasis is put in increasing mill capacity. Mills in the Visayas are considered more efficient, which is capable of processing 2000 kg a day compared to the average of 800 kg a day in Mindanao, and 200 kg a day in Luzon.
Aside from just the muscovado, the byproducts of the milling process are also useful. The bagasse produced can be used as a fuel source. While the mud/filter cake from the filters can be used as soil conditioners and are an important part of organic fertilizer production.
Compared to milling refined sugar, milling muscovado has several advantages. First, the hauling cost of the sugar cane to the mill is lower. Second, there is little waiting time in processing because there is a manageable mill-to-farmer ratio. Third, even low quality canes can be utilized and the finished product is easier to market and fetches a higher price.
The export potential of local muscovado is enormous. From 1990 to 1995, only an average of 15.5% of local production was exported. This later fell to 1.5% from 1996 to 2001. There are four types of muscovado produced in the country Class A (golden brown), B (brown), C (wood brown), and panocha. Our production in 2003 was 21.6 million kg 38% is Class A muscovado followed by Class B, C, and finally panocha.
One of the major problems in muscovado sugar is marketing. Currently, most of the muscovado produced is sold in markets by middlemen; there are also cooperatives like the Antique Muscovado Sugar producers Cooperative. There is little branding involved and standards vary from area to area. That is why a strong brand identity and establishment of product standards would ease marketing problems.
There is a great potential for profit in muscovado in 2005, farm gate prices for Class A muscovado in Antique for P14-73 per kilo and P2O.80. When sold in Manila, the muscovado is retailed at an average of P50 per kilo. Muscovado exportation has been steadily increasing over the years peaking at seven million tons in 2003. Prices in 2005 were posted at $1.44 per kilogram in the world market. Most exports went to the Netherlands, United Sates, Japan and Italy.
The growing demand both in the domestic and international markets for muscovado has resulted in efforts to push for a Philippine National Standard to ensure and maintain its quality. The standard will define quality parameters such as color, moisture, suspended solids, etc. Laboratory analysis has shown that compared to muscovado from other countries, Antique still lags behind in terms of quality. To reach international quality, the sucrose content of the sugar must be raised, while the moisture, ash and sulfate content has to be lowered.
The need to maintain standards has raised the question of whether the trade should be regulated or not. Because currently, the volume of production is very low it may not be able to afford the fees levied by a regulating body. Also it may not be cost efficient to set up a separate regulating body. It may also be hard to set standards given that the industry is still largely a backyard type. However regulation may lead to the establishment of cooperatives and other support systems to allow them to comply with proposed standards.
The domestic market may also prove to be just as lucrative as the export market as there is already a huge demand for muscovado. Currently, demand outstrips supply resulting in high retail prices for muscovado. Due to its unique smell and taste, there is also a huge industrial demand for muscovado. For example, Antique muscovado is currently used by banana chip manufacturers, as well as by dried fish manufacturers in Mindanao.
Consumer interest in healthy and organic foods has revived interest in muscovad9/sugar. Most households are now buying muscovado in lieu of refined sugar. Coffee shops are now also offering muscovado sugar. Given the rosy prospects of the muscovado industry, it is only fair to consider muscovado as a new sunshine industry.
Author: Kendrick Go, Marid AgriBusiness Digest, July 2008