The Sugar Regulatory Board is recommending that all sugar production for this crop year be allocated for domestic use (Sugar Order 1), including raw sugar which is typically also exported to the US. If order 1, alongside order 2 (importation of 150,00 MT of refined sugar) are both successfully implemented then this would help dampen sugar prices which have risen dramatically throughout the year, a result of the tight domestic production.<\/p>\n\n\n\n
Lower sugar prices would help improve the margins of restaurant operators MAXS (Target Price: P7.72), PIZZA (Target Price: P9.88), and JFC (Target Price: P247.00) through lower expenses when it comes to their dessert or sweets-oriented products.<\/p>\n\n\n\n
On another note, these companies would also benefit from the prices of chicken which have been stabilizing as of late. MONDE (Target Price: P17.00) also stands to experience relief from the potential developments in sugar, although we note that this would be more than offset by the weakness in then alternative meat category in the UK. URC (Target Price: P160.00) on the other hand would be relatively unaffected cost-wise since they are self-sufficient on their own sugar milling operations. While lower domestic prices may affect their revenues from the sales of sugar, we believe that this will be more than offset by the margin increases provided by lower wheat and palm oil prices.<\/p>\n","protected":false},"excerpt":{"rendered":"
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