The Sugar Regulatory Administration (SRA) is considering exporting surplus sugar for the crop year 2020-2021, preferably to the United States (US), to stabilize prices and supply.
SRA administrator Hermenegildo Serafica, in his report to Agriculture Secretary William Dar, said they are studying the possibility of exporting surplus sugar to the US to take advantage of Washington’s preferential rate.
“We forecast that we will have excess sugar this crop year 2020-2011, which will need to be exported,” Serafica said.
“We expect to produce 2,190,190 million metric tons (MMT) of sugar for crop year 2020-2011, higher than the previous year’s output of 2,145,693 MMT,” he added.
A sugar crop year in the Philippines starts in September and ends in August of the following year.
Earlier, local sugar producers urged the SRA to scrap sugar exports to the world market to ensure enough sugar in the country during the current coronavirus disease (COVID-19) pandemic.
Serafica, however, said that maintaining high stock inventory will only depress prices, especially now that sugar consumption and withdrawals from warehouses have slowed down.
Demand for sugar has been greatly reduced due to the limited operation of manufacturers of sugar-containing products, such as beverage companies, as well as industrial and institutional consumers like restaurants, he added.
“Export of domestic sugar will ease and help stabilize prices—at levels that are reasonably profitable to producers and fair to consumers,” Serafica said.
The Philippines has not allocated sugar for non-US markets for several years now, as the US remains its top destination for local sugar because of better prices compared to the world market, Serafica noted.
The Philippines, which has been a consistent and reliable sugar exporter, is one of the select countries given an annual allocation of sugar export to the US market at a premium under a tariff-rate quota.
In the previous crop year 2016-2017, the Philippines had a US quota of 136,827 MT. The volume may increase depending on Washington’s requirements during a particular season.
Tariff-rate quotas allow countries to export specified quantities of a product, like sugar, to the US at a relatively low tariff.
