The Sugar Regulatory Administration (SRA) has issued an order to allot 7 percent of sugar production for the current crop year for the US market and the remaining 93 percent for local consumption.
Sugar crop year in the Philippines starts in September and ends in August of the following year. This year, sugar production is expected to reach 2.190 million metric tons (MT).
Under the agency’s Sugar Order No. 1 series 2020-2021, a higher allotment for sugar intended for the US market was decided since the country’s domestic raw sugar withdrawals for the current crop year is only estimated at 1.97 million MT.
The issuance mentioned that the expected 2 percent growth in sugar production this crop year from the previous 2.145 million MT is driven by favorable weather conditions and more sugarcane area.
However, the SRA explained that the order will be assessed based on actual production and withdrawals trend and may be adjusted from time to time if ever the estimates will not reflect the actual situation later on.
Notably, during the last crop year, the allotment was 5 percent for the US market and the remaining 95 percent for local consumption as B sugar.
On the other hand, local sugar stakeholders expressed that even if they do not completely agree with this crop year’s allotment, they can work it out as long as the agency would not allot for the world market apart from the US.
“As much as theConfederation of Sugar Producers proposed 6 percent for A and 94 percent for B, we think the additional 1 percent which we estimate to be 153,000 MT over US quota of 136,000 MT might create problems due to demand in the US because of the pandemic. But we can live with that for as long as we have no D allocation (for world market) and no sugar importation for this crop year 2020-2021,” Nicolas Ledesma Jr., the group’s chairman inNegros and Panay, said in a statement.
Meanwhile, Asociacion de Agricultores de La Carlota y Pontevedra, Inc. president, Roberto Cuenca, stated that they will follow and abide with the SRA’s orders but emphasized that they advocated to just retain the 5 percent allocation for A sugar.
The Philippines’ sugar export quota under the tariff-rate quota (TRQ) to the US is currently the third largest among selected nations.
TRQ allow countries to export specified quantities of a product to the US at a relatively low tariff, but subject all imports of the product above a pre-determined threshold to a higher tariff.
The said quota is deemed important as the Philippines is only among selected countries given with an annual allocation of sugar export to the US market at a premium.