A Board Member of Sugar Regulatory Administration (SRA) 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.
In a letter, Emilio Yulo, board member of SRA, asked SRA Administrator Hermenegildo Serafica to revisit and review the agency’s estimates given the heavy rainfall the country experienced in Negros Occidental and with Batangas getting hit by Typhoon Quinta late last year,
“The projected national sugar production of 2.19 million metric tons (MT) appears to be a long shot. 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,” Yulo told Serafica.
“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,” he added.
The Philippines’ sugar crop year starts in September and ends in August of the following year.
Every start of the crop year, SRA, mandated to regulate the local sugar industry, gets to decide how much of the country’s expected sugar production will stay here in the country and will be exported to the world market to balance the prices.
For this crop year, SRA decided that 7 percent or 153,000 MT of the country's sugar output will be exported to the United States.
However, groups like CONFED and NFSP want this allocation terminated “in light of the obvious fact that we may not be able to reach our targeted sugar output for this crop year”.
“I enjoin industry stakeholders that our battlecry for now should be, let us ensure first that we have enough domestic supply,” 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.
Sugar production is currently 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.
Normally, A sugar is priced lower than B sugar.
"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.
Chan said that if the country continues to export sugar to the US, local producers will only lose money, while it's only the traders who stand to benefit from it.