SRA moves to boost sugar supply in domestic market

The Sugar Regulatory Administration (SRA) has issued an order removing its sugar allocation for the world market, reallocating the supply to the domestic market.

The move is expected to improve the composite price of sugar, which is used to measure the overall profitability of sugar planters. However, this will put the plan of the sugar industry to look for stable markets outside the United States in the backseat.

At present, the country exports sugar only to the United States under a quota scheme. The agreement gives the Philippines an annual sugar import quota of 136,201 metric tons (MT) at a premium price and a relatively low tariff.

With SRA’s new sugar order, 94 percent will be classified as “B” or domestic sugar while the remaining 6 percent will be classified as “A” or sugar for the US. In the old sugar order, 93 percent was classified as “B,” 6 percent was classified as “A,” and 1 percent was classified as “D” or sugar for the world market. Reserve or “C” sugar gets allocation only when there is oversupply of the commodity.

“Stakeholders requested to do away with the 1 percent ‘D’ sugar as it is too insignificant and just a hassle in the recording of the quedan,” said board member Roland Beltran in a text message.

“It’s already the tail-end of the milling season and we hope that the planters, particularly the small farmers, will be able to recoup [their investments],” said board member Emilio Yulo in a phone interview.

“Also, world market prices of sugar are going down in the past weeks and the disposal of `D’ sugar has become a problem,” he said, adding that the reallocation of “D” sugar would boost domestic supply.

In a statement, SRA Administrator Hermenegildo Serafica, along with Yulo and Beltran, projected an extended milling season for the industry. This means there is a possibility of harvesting a second crop in Negros Occidental.

This would stabilize the prices of sugar at “price levels profitable to the producers and fair to the consumers,” Beltran said.

To recall, the composite price of sugar hit a low of P1,150 per LKg at the start of the crop year mainly due to the high volume of sugar stocks.

At present, based on SRA records, the composite price of sugar is now at P1,550 per LKg.