Low prices slow down US sugar shipments


The Sugar Regulatory Administration (SRA) is studying options, including the selling of sugar to the world market and reallocation of stocks to address the slow down in shipments of sugar to the United States.

Butch Alisla, the chief of staff of SRA administrator Ma. Regina Bautista-Martin, said that the agency will come up with a Sugar Order by next week, which would allow traders and exporters to ship the remaining volume of “A sugar” or US quota sugar to the world market.

“We want to open a window for traders to dispose their remaining stocks, which have been committed under US quota,” Alisla said in an interview.

The Philippines has a regular US sugar quota of 138,827 metric tons (MT) this year. However, as of July 23, local exporters were only able to ship about 53,000 MT of sugar to the US.

To recall, Manila has temporarily halt exports of the sweetener to Washington because of saturated US market that resulted in very low prices of sugar.

Rosemarie Gumera, SRA manager for planning and policy, said the agency is also looking at other options like the conversion of “D” or world market sugar to alternative feedstock for biofuels.

“We are going to reclassify D sugar, which are usually committed to exporters and sugar-based exports to ethanol,” she said, adding that the reclassification would increase the support price for farmers through diversification of sugarcane production.

Gumera added that the SRA is surveying various districts across the country to look for viable areas that can be opened up for ethanol production.

“We are pushing for the expansion of sugar areas and improvement of productivity for us to meet the requirement for ethanol,” she further said.

Based on the data of the Department of Energy, the country consumes 306 million litters of ethanol annually. About 248 million liters were imported and 32.4 million liters were locally produced.

“There’s some disparity with the tally, but nonetheless, we need about 50,000 hectares of additional areas to meet the annual requirement for ethanol,” Gumera said.

The SRA officials said they expect to release by next month the new sugar allocation for crop year 2012-2013, adding that they expect production to slightly increase.

Sugar production is now at 2.457 million MT, or 9.53 percent higher compared to the last crop year. It also exceeded the 2.434 million MT target for crop year 2012-2013 by 1 percent.

The SRA classifies sugar into “A” for sugar for export to the US, “B” for domestic consumption, “C” for reserves, “D” for export to countries other than the US and “E” for food local processors.


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