The Sugar Regulatory Administration (SRA), which regulates the country’s sugar industry, is bent on temporarily suspending the country’s exports of sugar over the next 12 months as production is expected to further decline amid expected weather disturbances.
Based on SRA’s official management recommendations for Sugar Order (SO) 1, raw sugar production estimate for the crop year 2021-2022 has been pegged at 2.09 million metric tons (MT), lower than the estimate of 2.10 million MT the country was hoping to produce for crop year 2020-2021.
As such, SRA is now bent on temporarily suspending the exportation of sugar to the United States and the World Market over the next 12 months.
“Based on the PAGASA rainfall forecast, above normal rainfall condition is expected for the months of October 2021 to January 2022 over Batangas and Negros Island. While a slightly above normal rainfall on December 2021 to January 2022,” the draft of SO 1 reads.
“The Raw Sugar Supply and Demand of SRA-Regulation Projection Department shows that even with a carry-over volume of 158,557 MT domestic sugar, the country's sugar supply situation is better served with an all ‘B’ domestic sugar allocation for this crop year,” it added.
In the Philippines, a sugar crop year starts in September and ends in August. At the beginning of each crop year, SRA is supposed to release its official output forecast as well as the allocation of sugar production.
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.
Last week, the United Sugar Producers Federation (UNIFED) urged SRA to scrap the A sugar or the US sugar quota for the coming crop year, especially if the supply is just enough for the country’s consumption.
This developed as some players in the sugar industry are lobbying for a 7 to 8 percent allocation for A sugar, sources said.
“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.
Lamata said that while UNIFED agreed to a seven 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, “somebody made money, but it was not the farmers,” said Lamata.