No new sugar imports seen this year

MANILA, Philippines - The Sugar Regulatory Administration (SRA) assured the public yesterday that there would be no additional sugar importations this year, but the agency has yet to determine if there will be a need to import buffer stock for crop year 2011-2012.

In an interview with The STAR, Rosemarie Gumera of the SRA’s policy division, said that an actual determination of any importation for sugar crop year 2011-2012 which starts August 2011 and ends July 2012 will be made only after the 2010-2011 crop year ends.

The peak milling season is set to start in January-February next year for the current crop year and only after that will the SRA have a clearer picture of how much additional refined sugar will have to be imported.

Likewise. Gumera explained, the SRA board would still have to determine how much additional raw sugar it would also have to import following the damage to local sugarcane crops in the previous year due to the drought caused by the El Nino cycle.

The possibility of additional sugar imports surfaced following the decision of the National Price Coordinating Council (NPCC) Wednesday (Dec. 1) to lift the suggested reference price (SRP) of sugar for the month of December 2010.

Gumera said that the temporary lifting of the sugar SRP for December is in response to complaints and threats from sugar retailers about the large disparity between the actual cost of sugar which currently sells at P64 per kilo in the public markets and P60 in the supermarkets compared to the SRP of P56/kilo.

Gumera said the NPCC would meet again to decide if the surgar SRP would be reimposed by January since the peak sugar milling season will start by then.

The SRA explained that the spike in domestic sugar prices was influenced by the escalation of world market prices and a delayed milling season.

The government will have to import at least 300,000 tons of sugar in 2011 to ensure it keeps preferential export quotas to the United States and to maintain a buffer stock, Trade Secretary Gregory Domingo said on Wednesday.

Local prices of the sweetener have risen in recent months on higher world prices and a shortage in the local market after the milling season was delayed by a month.

Domingo said 200,000 tons were needed for export to the United States and 100,000 tons for buffer stocking. He said the government would talk to the industry and state-run Sugar Regulatory Administration (SRA) for a long-term solution.

“Maybe we can buy sugar when prices are low in February to April and then stock it up, and release it by June, July when there is no milling, up to September,” he said.

The SRA sets the timing and volume of imports. Board member Archimedes Amarra said there would be a meeting on Dec. 9 to review the current situation and Domingo’s recommendation.

“There is tightness in supply,” Amarra said. “But we are approaching the peak of the milling season and we feel supply will improve within the next two weeks.”

As such, Amarra, who is also executive director of the Philippine Sugar Millers Association, said it was too early to make a firm decision on import needs.

The Philippines returned to the global sugar market this year after four years, buying to meet local demand and to preserve preferential access for sugar exports to the US.

The country’s sugar production in the crop year starting September 2010 was projected by the SRA at 1.87 million tons, lower than the 1.97 million tons in 2009/2010, and annual demand is estimated at around two million tons.

The Philippines imported 250,000 tons of refined sugar in 2009/10 and was expected to import a similar amount in 2010/11 due to tight domestic supply, the US Department of Agriculture attache in the Philippines said in a report.

Amarra said sugar millers were worried importing sugar could create oversupply, and said the SRA might lift its production estimate for 2010/11.