The Sugar Regulatory Administration (SRA) is considering exporting the country’s surplus in sugar supply to the United States to stabilize prices here.
“We expect to produce 2.2 million metric tons (MT) of sugar for [the coming crop year], higher than the previous year’s output of 2.15 million MT,” SRA administrator Hermenegildo Serafica said. “We forecast that we will have excess sugar.”
The sugar crop year in the country begins in September and ends in August the following year. The SRA would need to issue its first order for the crop year, which would dictate the allocation of sugar for the domestic and export market.
Serafica said demand for sugar has been greatly reduced as the operations of manufacturing companies remained limited. Industrial and institutional consumers like restaurants are still not fully operational.
Last month, Serafica already dismissed the possibility of importing more sugar this year and the next, noting there was already an oversupply of the commodity.
As of Aug. 2, the sugar industry has an outstanding raw sugar balance of 430,000 MT.
But according to Raymond Montinola, spokesperson for Confederation of Sugar Producers Association Inc., a healthy year-end inventory for raw sugar must only be at 200,000 MT, just enough to cover the lean season before the crop year starts again. Anything in excess may disrupt prices both at the mill gate and retail.
“Export of domestic sugar will ease and help stabilize prices at levels that are reasonably profitable to producers and fair to consumers,” Serafica said, adding that withdrawals of sugar from warehouses have slowed down along with the country’s consumption of the commodity.
Currently, the Philippines is one of the countries that are given an annual allocation—at a premium and under a tariff-rate quota—for sugar exports to the United States market. While the volume usually hovers between 130,000 and 140,000 MT of sugar, it depends on the US’ sugar requirement during a particular season.
Tariff-rate quotas allow countries to export specified quantities of a product, such as sugar, to the United States at a relatively low tariff. INQ