Philippines ready to meet United States sugar export quota

MANILA, Philippines - The government wants to fulfill the US sugar export quota for this crop year without resorting to importation given its substantial carry-over volume from the previous crop year.

Sugar Regulatory Administration head Ma. Regina Martin said the agency is now closely monitoring the production of sugar mills.

In Negros region where more than half of the country’s sugar supply is produced, millers have already started crunching canes.

According to the SRA, there is still a large carry over volume of around 400,000 metric tons of raw and refined sugar combined.

“So that’s a lot of sugar. Around 200,000 MT of this is raw and 200,000 MT is refined. Most of this refined sugar is in the hands of the traders and is now going around,” she told reporters on the sidelines of the 37th Meeting of the ASEAN Ministers of Agriculture and Forestry held in Makati.

The Philippines has not imported sugar in the past five years.

“We hope to maintain this stance to become a modest exporter of sugar,” she said.

For crop year 2015-2016, the SRA has allocated to the domestic market – represented by “B” sugar quedans – 100 percent of the total expected raw sugar production of 2.27 million MT. 

This is intended to protect domestic supply and prices amid the prevailing dry spell that is expected to intensify in the last quarter of the year and linger until the first semester of 2016.

Out of this year’s expected production volume, domestic withdrawal is estimated to be around 2.25 million MT.

During the summer season, the extreme heat stunted the growth of canes in the Visayas region, particularly in Negros. The combination of reduced production and strong domestic demand placed great strain on sugar supply prompting the SRA to stop in June – the tail end of the previous crop year – all sugar exports to the US and the world market.

Despite incurring an export shortfall, the US raised the Philippines’ sugar export allocation for the current crop year amid the Southeast Asian country’s  good track record as an exporter.

The Philippines received an allocation of 142, 160 metric tons raw value (MTRV) for crop year 2015 to 2016, up from the export allocation of 138, 800 MTRV.

This is the third largest allocation provided by the US for the new crop year after allotments for Dominican Republic’s 185,335 MTVR and Brazil’s 152,691 MTVR.

“We can easily change allocations. The milling season will be in full swing in November and December. That is the time when we can discuss this again,” Martin said.

“We are still observing (the production) and we are working on a program. We would like to assure them (US) that we can export,” she added.

She said the government wants to protect the US market as it remains to be the most lucrative export market for Philippine sugar.

“We want to protect that. In Asean, we are the only one that can export to the US. We are the third largest quota holder in the world. Sugar prices in the world market are now very low. The US market is still a premium market so everyone wants to be able to sell to the US and not everyone can do that,” Martin noted.

World market prices have fallen to as low as $0.10 to $0.12 per pound whereas the US buys sugar at around $0.20 to $0.22 per pound.

“We’d like to keep that because it’s a very political decision for the US on who they will grant a quota,”  Martin said.