SRA urged to scrap sugar export allocation for US

A group of sugar producers urged the Sugar Regulatory Administration (SRA) to scrap the export allocation for the US market for the next crop year.

The appeal came just as the SRA was expected to release Sugar Order (SO) No. 1 in the coming weeks. The order will be the basis of SRA in setting its policies for the coming crop year starting September.

According to Manuel Lamata, president of the United Sugar Producers Federation (Unifed), certain industry players are pushing for a 7- to 8- percent allocation for the US market labeled as category “A” under SO 1.

He said there was no point to allocate “A” sugar when the country would have to import the commodity to fill the gap between local supply and the country’s sugar requirement, as the SRA had done in the current crop year.

Confusing signals

To recall, SRA board members Hermenegildo Serafica and Emilio Yulo said the importation of sugar for this year would be unlikely especially if the COVID-19 pandemic would drag on, noting that the quarantine restrictions allowed the industry to keep a healthy inventory without outsourcing.

This was also the SRA’s rationale for allowing traders to export excess sugar to the United States as part of the Philippines’ trade agreement with the former.

However, the SRA board eventually passed SO 3 allowing the importation of more than 85,000 metric tons of sugar, which were scheduled to arrive not later than Oct. 30 this year.

Unifed had agreed to a 7-percent allocation of “A” sugar in the current crop year although the price of sugar for export to the United States was lower at P1,100 per 50-kilo bag than the prevailing domestic prices then of P1,500 per 50-kilo bag.

Wrong forecast

SRA board member Roland Beltran said the agency’s policy direction was based on previous projections that did not meet the actual situation on the ground. These projections, he added, were based on reports of Mill District Officers (MDOs).

Beltran said he was not sure whether MDOs factored in the weather conditions during the cropping season, reflecting major flaws in the SRA’s data collection.

The SRA has recently been criticized for its sugar output forecasts that are usually revised in the middle of the cropping season for its inaccuracy. This has sown confusion among stakeholders who look at SRA data to determine production, demand and prices. INQ