The Muscovado Industry

MUSCOVADSO, that unrefined brown sugar with a strong molasses flavor, also known as “Barbados sugar” or “moist sugar”, is now widely regarded as a healthy sugar because of its high level of purity from the sugarcane juice. It can be used as sugar sweetener for coffee, and also for baking recipes, making rum and juices.

According to historical accounts of some muscovado producers in Antique, considered its original birthplace, Muscovado became a distinct product when sugar industry began to have surplus in the 18th century. The trading of muscovado then flourished. The opening of the Iloilo port in Western Visayas in the 1850’s facilitated and increased the export of Philippine muscovado. Muscovado then a backyard industry provided livelihood opportunities to some small-scale producers.

However, the growth of refined sugar industry made it difficult to position muscovado in the market. The refined sugar further expanded its reach caused by protectionism and access of the Philippine sugar to US market. The promise for better returns encouraged higher investments from foreigners and Filipinos in sugar central mills but misplaced the thriving muscovado industry.

Refined sugar found its way to the tables of Western consumers, ending the monopoly of muscovado. Then, in 1929, muscovado was totally replaced by centrifugal sugar or white sugar in the export market with 96% of the total exports going to the United States.

From its prominence in the 1800s, muscovado returned as a backyard industry in the countryside of the Philippines, especially in the provinces of Antique, Pangasinan, Tarlac, Iloilo, Batangas, Negros Occidental, Bukidnon, Daval del Sur, Sultan Kudarat and North Cotabato.

Decades of neglect resulted to low farm productivity, inefficient milling practices and undeveloped marketing channels. Numerous milling sites closed down while some farmers shifted to rice cultivation. Moreover, product quality and safety became major concerns that hindered muscovado from mainstream market.

Fortunately, in recent years, growing consumer preference for natural and healthy products provided the opportunity long awaited by this resilient industry. Market demands for muscovado in the country and abroad steadily increased. Hope can now be seen. Industry stakeholders are gaining motivation to improve and strengthen their capacity to compete in the local and international markets.

Rising from where it was, the Muscovado industry is now standing firmly in the crossroads where it needs to strategically position its niche in the market.

It can only do so by taking sound and palpable measures that address the following currents; 1) Full implementation of AFTA’s zero tariff on all imported sugar, including muscovado, in Asia by 2015; 2) Philippine government’s absence of protection for the industry, specifically, subsidy for the sugar producers; 3) Challenge for more competitive products and market pricing; 4) Better standards of manufacturing practices; 5) Higher international standards for organic production and fair trading; and 6) Increasing national and international demand for muscovado.

Most muscovado producers of the 70s, including the Negros-based AlterTrade Corporation which started in the 80s, must now accept the fact that muscovado production and its trading according to national and international standards is no longer their main or exclusive domain.

With the surge in the interest for healthy food products in the domestic and international market in the face of strings of health problems caused by junk food or franken food, coupled by the rise of international fair trade movement, the interest for muscovado and other organic products steadily increased.

With these developments, the second half of the 2000s have seen dozens of non-government organizations and people’s organizations tied up with their international funding partner agencies and domestic business institutions including banks to enter into financing, production, processing and marketing-trading of muscovado and other organic products.

Even the government’s Department of Science and Technology (DOST), Department of Trade and Industry (DTI) and have offered financial and technical services to muscovado and organic food producers to meet the growing market demands.

In a recent cursory research my group has done on the industry nationwide, the trend clearly points to the resurgence of muscovado by 2010 and 2011, from a backyard production to what others would now call a “sunshine industry” due to the vast potentials it has spurred.

Today there are at least 217 mills nationwide engaged in muscovado production, with average annual production of 18,592 MT and powered by 5,332 workers.

The annual production of 18,592 is still a far cry from the projected export demand of 11,124 and domestic demand of 16,751 or a total of 27,875 for 2012. For 2013, the projected export demand for muscovado is estimated at 11,987 while domestic demand is 17,506 or a total of 24,493.

This development is a positive development for Philippine muscovado producers and the whole economy.

For small and medium muscovado producers who have long been in the industry, this is even more a challenge, not only to assert the sustainability of the muscovado industry, but in demonstrating their ability to raise its production and organic standards for domestic and international market, and also in organizing, and providing capacity and technical assistance to new muscovado producers in the country.

As of late, I was informed that Sugar Regulatory Administration (SRA) together with a foreign partner will soon begin a comprehensive benchmark study on the muscovado industry in the country.

Well, I hope this project will not only provide a good database for SRA but will open the way for more interests and investments in the muscovado industry which is now making great breakthroughs here and worldwide.