Industry players volunteer to export raw sugar to US
A group of traders, millers and producers have signified their interest in exporting raw sugar to the United States, the Sugar Regulatory Administration (SRA) said.
SRA administrator Pablo Luis Azcona said the group is comprised of six to eight traders, millers and producers which volunteered to deliver 30,000 to 60,000 metric tons (MT) of raw sugar to serve at least a portion of the export quota allotted by the US.
“What they will do is to pool their produce in a ship to come up with a shipment of 30,000 to 60,000 [metric tons],” Azcona said.
“This was brought about because we have traders, producers and millers who have volunteered to serve part or if not the whole allocation given by the US market. This is voluntary. They approached us [the SRA],” he said.
Azcona said the SRA wrote a letter twice to the US Department of Agriculture. The first letter, which was sent at the beginning of the milling season, asked for a moratorium so the country would still be part of its sugar export allocation.
The second letter is seeking a green light from the US for the group of traders, millers and producers to begin shipping raw sugar which will be purchased directly from local farmers.
“This is what we are waiting for. Once the US gives a go signal to export sugar to them, our exporters will do it right away,” he said.
Azcona said the SRA board is in the planning stage and fleshing out the mechanics of meeting the US quota so that it won’t affect the livelihood of domestic farmers.
For the 2023-2024 crop year, the SRA allotted the entire sugar production for domestic use as it projected a decline of 10 to 15 percent in output depending on the severity of the anticipated El Niño phenomenon.
It pegged the total raw sugar production for this crop year at 1.85 million metric tons (MT).
In the Philippines, the crop year starts in September and ends in August of the following year.
Since the entire production is set aside for “B” or domestic market, Azcona said the SRA would need to issue a separate sugar order allowing the conversion of local sugar for the “A” or the US market.
The Philippines has not been fulfilling its export quota to the US in the last three years as it earmarked domestic sugar production solely for domestic use and relied on importation to plug the supply shortfall.
The last shipment to the US market took place in crop year 2020-2021 involving 112,008 metric tons commercial weight of raw sugar.
But in July, the US Trade Representative announced the raw cane sugar export quota for the country was kept at 145,235 metric tons raw value (MTRV) for 2024 fiscal year.
This is equivalent to nearly 13 percent of the in-quota allocation of the tariff-rate quotas (TRQ) on imported raw cane sugar totaling 1.117 million MTRV, the minimum amount to which the US committed under the World Trade Organization agreement.
The TRQ allows certain countries including the Philippines to deliver specified quantities of a product to the US at a relatively low tariff, but subjecting all imports of the product above a predetermined threshold to a higher tariff.
