RP’s sugar export quota to US up slightly to 142,000 MT in ’05

The United States has granted the Philippines an export quota allocation of 142,000 metric tons (MT) of sugar for 2005.

The export volume given to the Philippines is slightly higher than this year’s allocation of 137,352 MT and is the third highest allocation by Washington as part of its commitment to support developing sugar-countries.

The Office of the United States Trade Representative yesterday announced the country-by-country tariff-rate quota allocation of the raw cane sugar, refined sugar, and sugar containing products for fiscal year 2005.

A tariff-rate quota is an import policy that allows countries to ship specified quantities of a product to the US at a relatively low tariff, but subjects all other imports of that product to a higher tariff.

The United States Department of Agriculture (USDA) placed the in-quota quantity of the tariff-rate quota for raw cane sugar for 2005 at 1.117 million MT. This is the minimum level to which the US is committed to import under the World Trade Organization (WTO).

The countries which got the biggest export allocations are the Dominican Republic–185, 335 MT, Brazil–152,691 MT, Australia–87,402 MT and Argentina–45,281 MT.

Next year’s sugar exports to the US should ease apprehensions by local sugar producers and millers of another price fallout if the country fails to dispose surplus production.

Previously, the Philippine Sugar Millers Association (PSMA) said negotiations were firmed up recently for the exports of 30,000 MT of raw sugar pegged at about P450 per 50-kilogram bag.

The PSMA official said the first 10,000 MT will be shipped to US-based commodities trading house this October. The balance will be shipped in December or early January next year.

Currently, PSMA is in talks with other potential buyers of another 30,000 MT of raw sugar. Other sugar producers and millers’ organization’s are also negotiating with international trading houses. The Confederation of Sugar Producers Inc. is reportedly selling 35,000 MT; National Federation of Sugar Planters, 20,000 MT; Panay Sugar Producers Federation, 5,000 MT and United Sugar Producers Federation, 10,000 MT.

The local sugar industry is mulling exports of at least 232,000 MT of sugar to the world market, including Japan to prevent the skid of domestic sugar prices that would likely result from the anticipated surplus production this year.

Local sugar production in the current cropping season is expected to reach 2.3 million MT, higher than the projected national consumption of only 2.06 million MT. The sugar cropping season starts in September and ends in August of the following year.

Earlier this year, the sugar industry lobbied hard for the government to buy some 70,000 MT of excess sugar to prevent the further decline of prices which went down to as low as P620 per 50-kilogram bag. Millgate prices fell because of supply glut, along with the influx of smuggled sugar.