Philippine wants to meet US sugar export quota

MANILA, Philippines — The Philippines is targeting to meet the US sugar quota export allocation which it failed to attain over the years, as local production is expected to increase in the next crop season.

The Department of Agriculture and the Sugar Regulatory Administration are forecasting that the Philippines will have excess sugar for crop year 2020.

A sugar crop year in the Philippines starts in September and ends in August of the following year.

Local production may reach 2.19 million metric tons, up two percent from the recently concluded crop year which produced 2.14 million MT.

SRA is considering to export surplus sugar, preferably to the US, to stabilize prices and supply and to take advantage of Washington’s preferential rate.

The Philippines is exporting sugar to the US under a preferential trade scheme.

SRA board member Emilio Yulo said that the DA may be referring to meeting the tariff-rate quota (TRQ) allocations, which the Philippines has never completed for many years now.

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

The Philippines has not allocated sugar for non-US markets for several years now, while the US remains as the country’s top destination because of better prices.

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.

The SRA has yet to issue the new sugar order which would dictate the allocation for the next crop year.

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

The SRA classifies sugar as “A” for sugar for export to the US, “B” for domestic consumption, “C” for reserves, “D” for export to countries other than the US and “E” for local food processors.

Meanwhile, local sugar producers have been urging the SRA to stop selling sugar to the world market to ensure the stability of the domestic supply.

SRAadministrator Hermenegildo Serafica, however, said maintaining high stock inventory would only result in depressed prices, especially now that sugar consumption and withdrawals from warehouses have slowed down.

“Demand for sugar is greatly reduced as there has been a limited operation of manufacturers of sugar-containing products, such as beverage companies, as well as industrial and institutional consumers like restaurants, most of which are not fully operational,” Serafica said.

“Export of domestic sugar will ease and help stabilize prices — at levels that are reasonably profitable to producers and fair to consumers,” he said.