The Philippines will no longer export sugar to the United States (US) during the current crop year amid the expected shortfall in local production.
On Tuesday (March 30), Sugar Regulatory Administration (SRA) released Sugar Order (SO) 1-A, amending SO 1, which allotted 7 percent of the country’s forecasted sugar production for the year to ‘A’ sugar or sugar exports to the US.
SO 1-A also classified 100 percent of the sugar production as ‘B’ sugar, which is allotted for local consumption.
At the same time, SRA brought down its target local sugar production for the current crop year to 2.10 million metric tons (MT) from 2.19 million MT.
The Philippines’ sugar crop year starts in September and ends in August of the following year.
SRA’s decision came as La Niña became “more severe than initially expected that it brought heavy rains in all sugar-producing regions even flooding in several sugarcane fields”.
Some of the areas affected by the flooding were in the top sugar-producing province Negros Occidental, particularly Silay, Victorias, and Cadis.
From the latest report of the Philippine Atmospheric, Geophysical, and Astronomical Services Administration (PAG-ASA), La Niña is expected to last longer than previously reported.
Because of La Niña, sugar content in cane determined through 50-kilo bag sugar per ton cane is substantially lower, which eclipsed increase in sugarcane tonnage, SRA said.
The other day, SRA Board Member Emilio Yulo backed the call of some local industry players to scrap the export allocation of the country’s sugar production for the current crop year to the United States.
This, as groups like Confederation of Sugar Producers Associations, Inc. (CONFED) and National Federation of Sugar Planters (NFSP) fear that total sugar production for this year will not be able to cover this year’s demand.
As of February, the national sugar production is at 1.22 million MT. That leaves a balance of 965,375 MT to attain the projected national sugar production.
“As I have repeatedly stressed in my correspondences, it is unconscionable to export if eventually, we are to import which will again prompt the resurgence of calls to liberalize which industry stakeholders have been fighting against, knowing that this will kill the sugar industry,” Yulo said.
“It is also worth mentioning that milling may already be peaking at this time or in the next few months. In fact, for the month of January, the sugar production for the said particular month was the highest in 5 years and the 2nd highest in 8 years. The problem, however, is we do not know how many hectares of millable canes are still left for the particular crop year. It must be emphasized we could not have a scenario wherein the solution be to import,” he further said.
Earlier this year, Central Azucarera de Bais Chairman Steven Chan told Business Bulletin that the Philippines has been facing a prolonged shortage in sugar supply, and this should be enough reason for the government to stop allocating a portion of the country's annual sugar production for exports.
"We are definitely a net importer of sugar. We have no treaty obligation . There is no sense why we are doing something that we are doing. There is absolutely no reason to export when you have no excess," he further said.
Normally, A sugar is priced lower than B sugar.