MANILA, Philippines -- Despite having briefed President Benigno ?Noynoy? Aquino III on the tightness of the current sugar supply, Agriculture Secretary Proceso Alcala said his agency would consult farmers first on the need to import 150,000 tons of sugar and could come out with a decision by Thursday.

"The shortage (in sugar) is not that huge," Alcala said, although he could not say how much gap there has been between local supply and demand for sugar.

He said he would like to first consult farmers about imports, which would come on top of a similar volume procured earlier in 2010.

"If we find that there is really a need, we will import the sugar... It's also possible that we may no longer bring in the additional imports once we determine that there is no need for it after all," Alcala said.

However, the Philippines cannot afford to wait too long as it risks running out of sources, according to the Philippine Sugar Millers Association (PSMA).

Asked how long the Philippines can afford to wait on importing sugar given recent delays in the announcement of bidding for rights to import the sweetener, PSMA executive director Archimedes Amarra told the Philippine Daily Inquirer that imported sugar must be delivered to Manila by September 15 at the latest.

The DA has long announced that it will import an additional 150,000 tons of sugar.

However, the National Food Authority, which is helping the Sugar Regulatory Administration (SRA) facilitate the importation, has not received the required tax subsidy from the Department of Finance.

Meanwhile, analysts say that Thailand, a major sugar exporter, has overstretched exports. International reports said the Thai government might buy back sugar from traders to preserve local supplies.

Faraway Brazil, the world's largest sugar producer, is the next viable source of the sweetener.

The problem is, shipping from there takes 42 to 45 days against the 12 days from Thailand to the Philippines. Add to this the fact that there is a queue of ships already lined up to navigate the Panama Canal with deliveries to various countries.

SRA Administrator Bernardo Trebol said the Philippines might find itself in a tight situation since it has to allot time for bidding. "There has to be a bidding for the sake of transparency. And bidding requires more time," he said.

The Philippines' current crop year for sugar cane ends on August 31. Mills are set to start processing local sugar around September and October but the peak of milling is around end-November to early December.

"We have to secure buffer stocks for the months between end-August and the peak of milling, in case demand for sugar spikes," Trebol said.

This is because sugar stocks in local mills, estimated at 600,000 tons in June, will have been reduced by now due to daily withdrawals.

Both the SRA and PSMA have maintained that sugar prices should remain relatively stable as more imports boost local warehouse stocks before the lean months but said that securing stocks is crucial to keeping sugar prices low.

The Philippines was a net exporter for eight years until, early this year, it turned to imports as dry spells resulted in lower sugarcane farm productivity amid an already tight world market.

Recently, industry estimates on sugar production for the crop year 2009-2010 dropped.

Initial estimates said production would reach around 2.18 million tons. However, because of the extent of the drought due to El Niño, actual production may be around 1.97 million tons and milling may be delayed due to stunted sugarcane.

Compounding the situation is a 23-percent increase in consumption from last year, which is indicated by the amount of withdrawals of local sugar from mills.

Annual consumption of sugar in the Philippines is around 2 million tons.

The Philippines is importing sugar for the first time in eight years of being a net exporter in order to cope with a host of challenges: sugarcane farmers shifted to other crops in response to depressed prices last year, when supply was higher; estimates on this year's harvest were lowered due to drought linked to the El Niño phenomenon; and the Philippines' commitment to help the U.S. cope with a tight global supply in sugar by shipping an additional 36,000 tons of raw sugar to the premium market.

The Philippines' minimum yearly quota for the U.S. is 137,000 tons.

The Philippines has four classifications of sugar: "A" for the U.S. market, which normally makes up around 4 percent of stocks; "B" sugar for local use, which uses up about 90 percent of the country's sugar inventory; "D" sugar for non-U.S. exports, for which there is no fixed volume; and "C" or reserve sugar, which can be converted into any of the three other categories.

The allocation for the U.S. market, while relatively small, is always served because "A" sugar fetches a higher price than "B" or "D" sugar.

Officials said that while there has been concern over the Philippines' buffer stock of sugar before the start of the next crop year, the Philippines would want to keep serving the U.S. market in hopes of an increase in the regular yearly allocation of 137,00 tons in the future.

Analysts say that the sugar supply follows a two-year cycle. Supply could pick up for two years, depressing prices, only to fall in the next two years, resulting in high prices.