RP sugar imports seen at 57,000 MT

The Philippines is expected to import just 57,000 tons of sugar this year, or a third of what it bought last year, as local harvests may exceed initial estimates, officials said yesterday.

Supply was also boosted because the United States said it did not need any more sugar this year, freeing up the remaining 56,000 tons that the Philippines is allowed to export under an existing program, they added.

The Philippines is a net importer but sells sugar to the United States at prices higher than the world market. It had a sales quota of 137,000 tons from October last year to September this year and has so far exported only 81,000 tons.

"It looks like we need to import just the MAV," James Ledesma, head of state agency Sugar Regulatory Administration told Reuters, referring to the 57,000-tonne minimum access volume that Manila has committed to import at minimal tariffs this year as part of its agreement with the World Trade Organization.

"One of the major reasons is the request of the USDA (U.S. Department of Agriculture) not to ship the remainder of our sugar quota," he said.

He also said higher harvests would reduce imports.

The Philippines bought 172,000 tons of both raw and refined sugar in 2001.

Ledesma said some local firms have started booking their sugar imports for arrival in the country mostly in the third quarter.

Bumper crop

Ledesma projected that the country may harvest between 1.89 million and 1.9 million tons of raw sugar in the current crop year ending August, surpassing his initial forecast of 1.85 million.

The country produced 1.805 million tons in the previous crop year.

"We have so far produced 1.78 million tons and some mills are still operating so there is a good chance that total production would reach 1.89-1.9 million," he said.

Milling in the current crop year started in September and would end in June.

V. Francisco Varua, president of the Philippine Sugar Millers Association, predicted a higher production of 1.92 million tons of raw sugar in the current crop year largely because of good weather.

Early this year, the government estimated a sugar shortfall of at least 100,000 tons this year. The country consumes between 1.8 million and 1.9 million tons of sugar a year.

Varua said that he had initially estimated that the Philippines needed to buy another 50,000 tons to fill the shortfall in local output, besides the 57,000 tons that the country will import this year as part of its WTO commitment,.

"Local demand seems to be a bit slow (this year) and then production is a little bit higher, so we were thinking that in the worst situation we may have to import an additional 50,000 tons. But, because we don’t have to ship out sugar to the United States anymore so other than the MAV we don’t have to import more," he said.

El Niño

Industry executives said they did not expect the El Niño weather pattern, which meteorologists say may recur in the country starting in October, to affect the 2002/2003 crop (Sept/Aug).

Sugar cane for milling in the next crop year has already been planted, they said.

"If there is El Niño in October, it will affect the sugar crop in 2003/2004," Jose Maria Zabaleta, executive director at the Philippine Sugar Millers Association, said.

Varua estimated local raw sugar output in 2002/2003 at 1.92 million tons, or the same as his 2001/2002 production forecast.

Meteorologists have warned of the recurrence of El Niño, the cyclical warming of waters in the eastern Pacific ocean blamed for drought in Asia in 1997/1998, starting in October up to the first half of next year.