SRA jacks up sugar allocation for local market

Domestic production of raw sugar is expected to fall to 2.27 million tons from last crop year’s record high of 2.5 million tons—the highest in 34 years—due mainly to La Niña and the erratic weather conditions.

This prompted the Sugar Regulatory Administration (SRA) to recalibrate its raw sugar allocation. It raised the allocation for the domestic market to 93 percent from 85 percent and cut the share of sugar geared for the export market to 1 percent from 10 percent. The order set the allocation for the US market at 6 percent.

The new sugar allocation is contained in Sugar Order No. 1 issued by the SRA earlier this week. This order is deemed the most important document released by the SRA at the beginning of every year as it serves as the basis of the agency in setting its policies for the rest of the crop year.

“We consulted our stakeholders and run our own numbers based on our records as to the projected production and sugar withdrawals,” SRA board member Roland Beltran said.

“The unanimous decision of the sugar board is to allocate 6 percent for our commitment to the US market, 93 percent for local consumption to ensure that we have more than enough supply, and 1 percent for exports to maintain our presence in the world market,” he added.

The country’s US sugar quota varies yearly. For crop year 2017-2018, the quota is 136,201 metric tons (MT) of sugar, 44.89 percent lower than the previous allocation of 197,352.49 MT.

Even as beverage companies are expected to increase their consumption of sugar this year, SRA Administrator Hermenegildo Serafica said the sugar industry would be able to keep up with the growing demand.

As for the beverage companies’ remaining high fructose corn syrup, Beltran said the SRA had already reclassified them for exports. He said it was now up to the companies to schedule the shipment of their HFCS pursuant to the guidelines governing Sugar Order No. 5, or the rules and procedures for sugar exportation.

Pepsi Cola Products Philippines Inc. has about 15,000 MT of HFCS to export while Coca Cola Femsa Philippines has 5,000 MT.

As of last week, the average retail prices of sugar have slightly dropped from last month’s level to P47.18 per kilogram (kg) for raw sugar, P50.18 per kg for washed sugar, and P55.01 per kg for refined sugar.

Beltran said they were expecting prices to stabilize over the next few weeks.