Sugar imports under study

MANILA, Philippines — The Sugar Regulatory Administration (SRA) is now studying the possibility of allowing sugar imports during the post-milling season to ensure that the country will have sufficient stocks and prevent skyrocketing prices like what happened two years ago.

SRA administrator and CEO Pablo Luis Azcona made this disclosure after President Marcos endorsed the recommendation of the Private Sector Advisory Council-Agriculture Sector Group (PSAC-ASG) last week to allow the importation of sugar during the off-harvest and post-milling seasons.

Marcos backed the sugar importation proposal between 185,000 metric tons and 200,000 MT. The PSAC-ASG argued that the proposed import volume is necessary to build up the country’s sugar buffer stock.

The sugar industry is set to enter its post-milling season, with one last remaining mill winding up its operations this month.

Azcona said the import proposal being endorsed by the President is aimed at ensuring that the country would not have a shortfall in supply, particularly for refined sugar, once all sugar mills stop operating. Sugar refineries depend on the country’s raw sugar supply to produce refined sugar.

Azcona said the country has produced 1.92 million MT of raw sugar so far in the current crop year, which is higher than the 1.8 million MT production level in the previous crop year.

However, Azcona noted that the production volume remains insufficient to meet the country’s estimated demand of 2.2 million to 2.4 million MT on top of the need to maintain a healthy buffer stock level.

Azcona said there has been growing demand for sugar from industrial users who are already building up their buffer stocks as the current milling season is set to end a month earlier than usual.

The SRA has devised a mechanism that will allow it to determine if there is already a need to allow sugar imports in the country, Azcona said.

Under the mechanism, Azcona added, once sugar stocks hit a certain “trigger point” or fall below three months’ worth of supply, the SRA may consider opening up a sugar import program.

The SRA estimates that monthly sugar demand is between 180,000 MT and 240,000 MT.

Under existing laws and regulations, the SRA regulates the importation of sugar as part of its mandate to secure the welfare of both sugarcane farmers and consumers.

“If we have three months (of sugar supply), we will not have a shortfall and we will prevent August 2022 from happening again,” Azcona told reporters in a press briefing.

“We are preventing a drop in sugar supply to the level that the retail market would be insecure and cause a spike in prices like what happened in 2022 wherein retail prices reached as much as P130 per kilogram,” he added.

Azcona was referring to the sugar crisis two years ago wherein retail sugar prices, both for raw and refined, skyrocketed to historic highs as the country suffered a shortage in supply caused by delayed import programs and anemic domestic production.

If approved, the sugar imports might arrive between July and early September, just before the milling season begins between Sept. 15 and Oct. 1, Azcona said.

Azcona noted that sugar refining in the next crop year would begin only around October.

He said the proposed sugar import program would still undergo stakeholders’ consultation.

Azcona pointed out that sugarcane farmers stand to benefit as well from prospective sugar imports that could help in stabilizing market prices since farmers are also consumers who buy sugar at a retail level.

A stable sugar supply, Azcona said, would ensure that farmgate prices of sugarcane remain at a profitable level for farmers while guaranteeing that industrial users and manufacturers would have enough supply to run their factories.

The country’s combined raw and refined sugar supply as of May 5 stood at 1.15 million MT, about 35 percent higher than the 851,370 MT recorded in the same period last year, based on latest SRA data.

Broken down, the country has 568,734 MT of raw sugar supply, about 26.5 percent higher than the 449,541 MT recorded stocks last year. Meanwhile, the country’s refined sugar stocks stood at 583,694.1 MT versus the 401,829.25 MT recorded supply a year ago.