Sugar output seen to fall short of target

MANILA,  Philippines–Domestic production of raw sugar is expected to fall short of the 2.5 million-ton goal for the current crop year that ends in July, prompting regulators to scrap export allocations for countries other than the United States.

According to Regina Martin, administrator of the Sugar Regulatory Administration (SRA), raw sugar output for 2014-2015 is expected to be about 35,000 tons less than the target.

Even then, output is still anticipated to be higher than the previous crop year’s 2.45 million tons.

Martin told reporters that scrapping the allocation for non-US sugar exports was brought about by the adverse impact of unfavorable weather conditions on sugarcane plantations in the Visayas.

“Rains last September affected the maturity of the canes,” she said.

Considering this, the SRA issued Sugar Order No. 1-A on March 12 to increase raw sugar allocation for domestic use to 95 percent of the local output. Previously, the allocation was 90 percent.

Martin said that while the 5 percent allocation for the non-US market was removed, the SRA retained the 5 percent earmarked for US exports in compliance with the country’s commitments to the World Trade Organization.

In September 2014, the Office of the United States Trade Representative announced that it had maintained the Philippines’ sugar quota allocation of 142,160 tons for fiscal year 2015 that started last Oct. 1.

Data from the USTR show that the Philippines accounts for some 13 percent of 1.12 million tons, the minimum volume of raw cane sugar that Washington is committed to allow into the US market under the World Trade Organization agreement.

Also, the Philippines has the third-largest tariff rate quota on raw cane sugar for US trade partners, after the Dominican Republic and Brazil.