Government urged to export 6% of local sugar to US

MANILA, Philippines — Sugar stakeholders are calling on the government to export at least six percent of the expected sugar production to the US market to balance local supply as a hike in output in this crop year is expected.

In its position paper, the Confederation of Sugar Producers Association Inc. (Confed) is asking the Sugar Regulatory Administration to increase the allocation of sugar intended for the US market by a percentage higher than last year’s quota.

Confed is pushing for a six percent allocation for “A” sugar for export to the US, and 94 percent for “B” sugar or for domestic consumption.

Based on the existing sugar order, 95 percent of the sugar production has been allocated for the domestic market while the remaining five percent was for the US market.

Such a move aims to balance the sugar supply in the country as local production is seen reaching 2.19 million metric tons, up two percent from the recently concluded crop year which produced 2.14 million MT.

A six percent allocation is equivalent to about 131,000 MT plus the 14,000 MT beginning stock balance for “A” sugar.

“We will have enough allocation to the US market of about 136,500 MT which should balance out our supply considering that projected excess for the next crop is also about 48,000 MT for both raw and refined sugar,” Confed chair Nicolas Ledesma said.

Further, Confed stressed that there is no need for any “A” sugar replenishment in the coming crop year, and that an early swap must come from sugar produced in the same crop year.

The group also noted that “D” or world sugar allocation is unnecessary and that no sugar importation will happen in the coming crop year because “prevailing economic conditions will likely lead to a reduction of sugar consumption.”

The Department of Agriculture has already said the Philippines is targeting to meet the sugar quota export allocation to the US which it has failed to hit over the years.

The Office of the US Trade Representative recently said the Philippines was given a sugar quota of 142,160 metric tons raw value or 136,201 MT commercial weight. This is the same volume allocated to the country in the last four years.

The country is one of the select countries given an annual allocation of sugar export to the US market at a premium under a TRQ. TRQs allow countries to export specified quantities of a product, like sugar, to the US at a relatively low tariff.