NFA may scrap plan to export and import sugar

The National Food Authority may scrap a plan to export a total of 100,000 metric tons of raw sugar and to import the same amount of refined sugar.

President Estrada earlier approved the export of 100,000 metric tons of NFA raw sugar to the world market to ease a local supply glut. The same amount of refined sugar will be imported by June of this year before the start of the lean sugar supply period.

However, despite several attempts at bidding out the contract to import and export sugar, the NFA has failed to attract interested parties from the private sector.

The first attempt to bid out the purchase of 25,000 tons of raw sugar and the supply of an equivalent amount of refined sugar was declared a failure after the export bids were considered too low and the supply bids too high. A second bidding for the first tranche of 25,000 tons also failed.

The NFA then bid out the purchase of 30,000 tons of raw sugar and the supply of 30,000 tons of refined sugar. The bidding was also declared a failure.

NFA deputy administrator Gregorio Tan said another attempt to bid out the second batch of 30,000 tons will be conducted on March 16.

On the first tranche, Tan said that technically, they can go into a negotiated sale following two failed biddings. "But we would first like to see what will happen on March 16," he said.

"But regardless of what happens with the first and second tranche, we have already decided not to export/import anymore the remaining 50,000 metric tons covering the third and fourth tranches," Tan added.

The NFA officials explained that since the peak local sugar production months are already over, there is no more reason to export sugar. "The main reason why the President approved the export/import plan was to remove the surplus sugar during the peak supply months. But because of the delays, we were not able to export the sugar on time," he said.

The entire 100,000 metric tons of raw sugar was supposed to be shipped out this month.

Tan revealed that the 100,000 tons of raw sugar may either be sold as raw in the domestic market or as refined. NFA plans to sell the sugar on a forward basis to local buyers.

Sugar Regulatory Administration (SRA) chief Nicolas Alonso confirmed to The STAR that the peak supply months are indeed opver, and that raw sugar prices have already surpassed the P700 to 50-kilo bag mark.

From P800 per bag in September last year, raw sugar prices dropped to as lo as P600 per bag and have remained at the P600 to P650 per bag price level due to the unabated entry of cheap smuggled sugar.

"I believe that smuggling of sugar has stopped and this is also one reason why the price of raw sugar has improved," Alonso said.