Potential sugar exports to the United States opposed

Published August 24, 2021, 12:47 PM

by Madelaine B. Miraflor

The Sugar Regulatory Administration (SRA) is set to release the allocation of the country’s sugar output for the next crop year, but a group of sugar producers wants to make sure that 100 percent of production stays in the country for domestic consumption.

SRA logo

In a statement, the United Sugar Producers Federation (UNIFED) urged the SRA to scrap the A sugar or the US sugar quota for the coming crop year, especially if the supply is just enough for local consumption.

“There is no point to allocate A sugar when we will also import the differential to satisfy the local needs,” said UNIFED President Manuel Lamata.

SRA is the government agency tasked to regulate the sugar industry. At the beginning of each crop year, and in order to balance the prices, the agency needs to decide how much of the country’s expected sugar production gets to stay here in the country and will be exported to the world market.

The Philippines’ sugar production is divided into different classifications, including ‘B’ for domestic sugar, ‘A’ for sugar exports to the US, ‘D’ for sugar exports to the world market or other countries, and ‘C’ for reserves.

By next week or so, SRA may issue Sugar Order (SO) 1, which should contain the agency’s production forecast for the next crop year as well as the classifications. The sugar crop year in the Philippines starts in September and ends in August of the following year.

The word on the street is that there are some players in the sugar industry are now pushing for a 7 to 8 percent allocation for A sugar.

Lamata said that while UNIFED agreed to a 7 percent allocation of A sugar last year, the problem is that “the farmers were short-changed because the differential given was only P100 instead of the expected P400” in terms of prices.

In other words, Lamata said “somebody made money, but it was not the farmers.”

To recall, the Philippines was able to export as much as 85,547 metric tons (MT) of sugar during the current crop year despite SO 1-A, which was issued by SRA in March and removed the country’s supposed allocation for sugar exports to the US.

SO 1-A means that 100 percent of the country’s sugar output for the year should stay here in the country.

Such exportation made it possible for SRA to issue SO 3, which allowed the importation of the same amount of sugar until October.

To the agency’s defense, SRA Administrator Hermenegildo Serafica said most of the sugar exported during the year was sold before SO 1-A was issued.

Right now, Serafica is hoping that the country, through accredited importers and traders, will be able to complete the importation of 85,547 MT of sugar by October.

Lamata, for his part, said scrapping the A sugar has been done in the past when the country’s sugar production did not meet local demands. “It has been done, and we are asking SRA to do it again and prioritize the local market.” He also lashed at SRA for the delay in coming up with crop estimates for this year.

“This has to be conducted immediately and we urge the SRA to check on sugar balances of the mills so we can come up with accurate data,” Lamata said.

“Sugar mills have already opened yet we have yet to hear from SRA as to their projection for this crop year,” he added.

When asked about the agency’s output forecast for the next crop year, SRA Board Member Roland Beltran said the management has yet to finalize it.

 
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