Sugar output seen enough to meet additional US orders

Philippine sugar production remains at “comfortable” levels even as Manila serves additional orders from the United States, according to industry estimates.

The Philippine Sugar Millers Association (PSMA) said that as of the estimate in May, the country’s sugar production had reached 2.211 million metric tons. As millers continue to process sugarcane harvests into sugar, output is expected to reach the target of 2.24 million metric tons before the end of the milling season in July.

“We are comfortable with our production. We can serve the additional US quota, which amounts to 75,540 metric tons raw (sugar),” PSMA legal officer Jesus Barrera said in an interview.

The Sugar Regulatory Administration (SRA) regularly monitors the progress of milling. “We are confident that we will meet our target,” SRA policy and planning manager Rosemarie Gumera said.

“Additional sugar orders from the United States must arrive in the buyer-country on or before Oct. 1, 2012,” according to the SRA announcement earlier this week.

The United States pays premium price for Philippine sugar ordered under its quota system, making it a priority market for Manila.

The Philippines has four classifications for its sugar inventory: “A” is for the US market; “B” sugar is for domestic use, which takes up the bulk of the country’s sugar stock; “C” is for reserve, which can be converted into any of the three other categories’ and “D” sugar is for non-US exports, for which there is no fixed volume.

The United States’ sugar importation is strictly controlled by tariff-rate quotas or TRQs, which set the amount of sugar that can enter the country from abroad at a low or zero duty. The amount set aside for import under TRQs is computed based on stakeholder consultations and on supplier-countries’ reliability. Quota volumes are set yearly by the US Department of Agriculture, while the US Trade Representative allocates the TRQs among supplier-countries.

TRQs must meet the United States’ obligations to the World Trade Organization, currently at a minimum of 1,117,195 tons of raw sugar and 22,000 tons of refined sugar. The 2008 Farm Bill also allows the US Department of Agriculture to increase sugar TRQs on April 1 of each year if a shortage is expected.