A sugar industry group is pushing to increase the allocation of local sugar intended for the US market to address an expected surplus, which may depress the profit of local producers and millers. In a statement, the Confederation of Sugar Producers (Confed) said doing so would balance the sugar supply in the country, which was projected to hit 2.19 million metric tons (MT) this year versus last year’s production of 2.15 million MT.
The volume may not be absorbed by the domestic market given the slowing demand for the commodity.
The group submitted a position paper to the Sugar Regulatory Administration (SRA) recommending a 6-percent allocation for “A,” or the US market, and a 94-percent allocation for “B,” or domestic market.
The SRA is expected to release an order before the start of the crop year in September. This is intended to guide stakeholders with their operations for the rest of the crop year.
“A 6-percent ‘A’ allocation will amount to 131,000 MT. Add to that the 140,000 MT beginning stock balance we have for ‘A’ sugar, we will have enough allocation to the US market of about 136,500 MT. This should balance out our supply considering that the projected excess for the next crop is also about 48,000 MT for both raw and refined sugar,” Confed Negros chapter chair Nicolas Ledesma Jr. said.He added the group was also pushing for a no-importation policy given that the “prevailing economic conditions will likely lead to a reduction of sugar consumption.”Last week, SRA Administrator Hermenegildo Serafica said they were “studying the possibility of exporting surplus sugar to the US to take advantage of Washington’s preferential rate.” INQ