Manila is no longer shipping sugar to world markets this year but is crafting a scheme to meet its exports commitments to Washington, the Sugar Regulatory Administration (SRA) said on Thursday.
In a telephone interview, SRA chief Ma. Regina Bautista-Martin said 100 percent of sugar production for crop year 2015-2016 would be allocated for domestic use to keep up with increasing demand.
Sugar production is expected to reach 2.25 to 2.35 million metric ton (MT) for crop year 2015-2016.
A sugar crop year in the Philippines starts September and ends August.
“Production will be wholly allocated to the domestic market because we have anticipated that output will be the same level as the demand,” Martin said, noting that local consumption will be around 2.2 million metric tons.
The SRA chief cited technical observation of the weather, cane growth and other factors, discussions with producers and candid talks with “Philippine sugar soothsayers” for the lower production targets.
She said the Sugar Board would still decide on the final allocation before the start of the crop year.
For crop year ending August 2015, the Philippines was able to produce a total of 2.316 million MT–short of target 2.46 million MT.
Blamed for the shortfall were unfavorable weather conditions that affected major sugarcane plantations, particularly in the Visayas region.
The prolonged dry spell toward the end of the current crop year also impacted sugarcane crops.
The SRA chief noted that the Philippines has about 200,000 MT of the sweetener left from the previous cropping season after several conversion/reallocation programs.
“Given the scenarios, our conversation programs have helped us maintain a healthy buffer at the end of this crop year,” she said.
Martin added that they expected to honor their commitment to supply Washington with enough sweetener, adding that they are “still crafting/studying a program on how they will comply with the US sugar quota.”
The Philippines is one of the select countries,that are given an annual allocation of sugar export to the US market at a premium.
For this crop year, Manila has a regular US sugar quota of 138,827 MT.
Tariff-rate quotas allow countries to export specified quantities of a product to the United States at a relatively low tariff, but subject all imports of the product above a pre-determined threshold to a higher tariff.