By Madelaine B. Miraflor
Thailand, the world’s second largest sugar exporter, is hoping to bag most of the deals to supply the Philippines with cheaper, imported sugar.
On Monday, Sugar Regulatory Administration (SRA) released Sugar Order (SO) No. 10, which ordered the importation of 100,000 metric tons (MT) of bottlers’ grade refined sugar; 50,000 MT of standard grade refined sugar; and another 50,000 MT of raw sugar for domestic tolling or direct consumption.
This will be the first time in more than two years that traders and millers from the Philippines will be allowed to import sugar from other countries.
An SRA official said that the Philippines will likely source these new stocks from Thailand, given the previous deals the country had with them in terms of sugar imports.
“In fact, even before we issued that order, it has already been announced and reported in Thailand that the Philippines is importing sugar,” the source said.
When asked who informed Thailand about it, the source said it may be the prospective importers or sugar traders from the Philippines.
To be specific, Thailand is expected to export around 7 million MT to 11 million MT of sugar this year.
A data from the US Department of Agriculture (USDA) showed that sugar production of Thailand for market years (MY) 2017 to 2018 and 2018 to 2019 is expected to increase to a record 13 to 14 million MT.
This, while the local sugar consumption will likely decline by 1 to 2 percent annually due to the new beverage sugar tax.
“This is expected to lead to record sugar exports,” USDA said.
To be specific, Thailand’s sugar exports, based on USDA computations, are likely to increase to 10 to 11 million MT driven by bumper sugarcane production.
Its sugar exports are expected to consist of 4 to 5 million metric tons of raw sugar and 5 to 6 million metric tons of white and refined sugar, mainly to Asian countries that have free trade agreements with Thailand.
SRA will be accepting applications for import allocations from prospective sugar traders starting June 18 until August 31.
“Traders said they can bring in the new supply [from Thailand] within seven days,” the source further said.
For this particular importation, the SRA requires eligible sugar traders to have Certificate of Reclassification Rights (CORR).
Reclassification rights shall refer to the right to reclassify imported ‘C’ sugar to ‘B’ sugar. ‘C’ sugar is considered Reserve Sugar and for other purposes.
“The SRA Board shall reclassify the imported ‘C’ sugar to ‘B’ sugar upon submission by the eligible importer or international sugar trader to the SRA of a written request for reclassification indicating the volume to be reclassified and the address of the warehouse where the ‘C’ sugar is stored,” the SO 10 further reads.
The SRA official said this program will give the agency the control when to release the imported supply to the public.
As of now, the country’s raw sugar stocks stand at 602,393 MT, which is lower by 38.87 percent from last year, while refined sugar is at 288,363 MT, down by 33.43 percent from last year.
It was in 2016 when SRA last allowed traders and millers to import more than 100,000 MT of sugar to also stabilize the prices. This would be the country’s first sugar importation in six years.
This was amid fears that El Niño could significantly cut the sugarcane output in the following crop year.
During that time, the Philippines also imported sugar from Thailand.
Meanwhile, the Australian government has also called on the Philippine to lower its tariff on imported sugar so other foreign countries can also penetrate the local market.
“We welcome any move from the Philippines to lower the tariff on sugar. This is beneficial to Filipino consumers who currently pay very high price for sugar. Allowing competition from exports would definitely reduce the price,” said Australian Ambassador to the Philippines Amanda Gorely.
Right now, 80 percent of Australia’s sugar production are allotted for exports to different countries.
The Philippine tariff on raw and refined sugar imports originating from ASEAN member countries is around 5 percent, while our most-favoured-nation tariff (MFN) for raw and refined sugar remains at 65 percent.