Agriculture Business Week

Consumer interest in healthy and organic foods has revived the interest in muscovado sugar.

Did you know that excessive consumption of refined sugar can lead one to suffer from increased cholesterol levels, gallstones, and weak eyesight? For years, refined sugar has been the primary sweetener for everyone. But, recent research has shed light on some health complications caused by excessive intake of refined sugar. Because of the general trend these days for more healthy options, people are rediscovering healthy and organic foods like brown rice, muscovado, etc. These products often contain little chemicals and undergo little processing. Of these products, muscovado has one of the greatest potentials in terms of export and may be the key to revive the country’s flagging sugar industry.

Muscovado also known as “Barbados sugar” or “moist sugar,” is a type of unrefined brown sugar with a strong molasses flavor. It is dark brown, and slightly coarser and stickier than most brown sugars. Unlike most other brown sugars, which are made by adding molasses to refined white sugar, muscovado takes its flavor and color from its source, sugarcane juice. It offers good resistance to high temperatures and has a reasonably long shelf life. This unrefined sugar goes well with coffee and other beverages, and was one of the most prominent export commodities of the Philippines, especially from the Negros region from the i8oos until the late 1970s. It is commonly used in baking recipes and making whiskey.

Muscovado production is naturally labor and time intensive and was usually produced small scale in backyards. This method of production was overtaken with the rise of the large sugar plantations. Due to the access Philippine sugar had to the US market during its time as a US colony and the Cold War period, investments flowed into the local refined sugar industry at the cost of the muscovado industry. This reached its peak in 1929, when 96% of our sugar exports were refined sugar.

Numerous milling sites closed due to decades of neglect and poor marketing. Farmers also shifted from cane production to rice production. These led to poor quality and lax standards that contribute to the decline of muscovado. In a much smaller scale, muscovado continued in Antique, Pangasinan, Tarlac, Iloilo, Batangas, Negros Occidental, Bukidnon, Davao (let Sur, Sultan Kudarat, and North Cotabato. Production in these areas was restricted to a few families.

The muscovado industry was in a slump until a few years ago when consumer preferences looked towards natural and healthy products. This increased market interest breathed back life to the almost dying industry. Since then, there has been renewed interest in developing and expanding production and distribution.

Sugar is one of the prime commodities traded in the market today. Most of the sugar comes from the tropical sugar cane which can be processed either as refined or raw. Raw sugar that produces muscovado is made by heating cane juice. Further processing yields refined sugar used to make casters,granulated, and icing sugar.

Annual global sugar production reached loo million tons with 13 million hectares planted in 2002 with most of the sugar coming from India, and Brazil. Sugar also forms the agricultural backbone of some countries like Barbados and Mauritius. Sugar from these countries is usually produced from sugarcane. Europe, on the other hand, grants heavy subsidies to their sugar industries based on sugar beets. This causes reduced revenues on other sugar producing countries.

In 2002, muscovado production was pegged at 13.8 metric tons globally with India being the top producer with 9.8 metric tons followed by Columbia and Pakistan. The Philippines was the eight largest producer with 0.1 metric tons representing 0.8% of total production.

The decentralized nature of muscovado production in the country has made it difficult to ascertain the number of mills in the country. But in 1994, the Sugar Regulatory
Administration (SRA) estimated that out of 475 mills, only 304 were operational. Most of the mills were located in the traditional areas of muscovado production. According to an SRA report released in 2006, there was only 2,071 hectares allotted for muscovado production which is only a minuscule part of the 396,135 hectares planted to sugarcane. Antique tops the muscovado producing provinces followed by Negros Occidental, and Sultan Kudarat.

Most muscovado farmers are small scale farmers with an average landholding of just over a hectare. Due to the small size of the ventures, the farmers often have to perform multiple functions. They are usually the ones who plant, harvest, process, and even market the products. Household members all contribute to the production cycle.

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 8ookg a day in Mindanao, and 200 kg a day in Luzon.

Aside from just the muscovado, the by-products 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 P20.80. 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 $1.44per 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 muscovado 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.