Production for the 2010/2011 crop year ending August was now estimated to reach 1.94 million tonnes, down 1.5 percent from a December estimate of 1.97 million tonnes, the Sugar Regulatory Administration (SRA) said.

Although higher than the original estimate of 1.87 million tonnes, the projected output is slightly lower against actual production of 1.97 million tonnes in the 2009/2010 crop year.

SRA Administrator Regina Bautista-Martin told Reuters the latest estimate could change given an erratic weather, and the agency may announce a final production forecast in May or June.

"Withdrawals from milling and refining warehouses have been slow compared to last year, so for now we see no need to import," she said in a phone interview.

Rosemarie Gumera, manager at SRA's planning and policy department, said withdrawals in the first half of the current crop year were about 50 percent lower for both raw and refined sugar compared with the same period a year earlier, with the market still holding supply from last year's imports.

"The decision to import is not only based on production figures. We also take into account withdrawals from warehouses, which have been very slow," Gumera said in a separate interview.

Raw sugar stocks at warehouses reached 459,241 tonnes as of Jan. 9, down from 499,765 tonnes a year ago, SRA data showed. Withdrawals starting September reached 374,176 tonnes.

Domestic supply, including an inventory of around 300,000 tonnes at the end of the previous crop year, has been boosted further by around 80,000 tonnes of imported sugar that arrived in September, Gumera said.

Local supply could fully cover the 136,201 tonnes of raw sugar needed for preferential export quotas to the United States for 2010/2011 crop year, she also said.

"Withdrawals until August may reach 1.9 million tonnes against a production estimate of 1.941 million tonnes, which means domestic supply is just enough," Gumera said.

Manila returned to the global sugar market in 2010 after four years of absence. It bought 250,000 tonnes to meet domestic demand, with local output delayed due to the drought brought about by the El Nino weather phenomenon last year.