The Sugar Regulatory Administration (SRA) has suspended exports of sugar to the world market and the United States as production levels fell below target because of a prolonged dry spell.
It allowed reallocation of remaining “D sugar,” or world market sugar, to “B sugar,” or domestic market sugar, which will cover weekly sugar production during the week ending May 15, 2015 and subsequent week-endings of cropyear 2014-2015.
“All remaining sugar to be produced during the period will be allocated for domestic use,” SRA Administrator Ma. Regina Bautista-Martin said in a telephone interview on Thursday.
The adjustment to the distribution of sugar allocations resulted from unfavorable weather conditions that affected major sugarcane plantations, particularly in the Visayas region.
“We were not expecting that intense heat and dry spell would have an immediate impact on our standing sugarcane crops,” Martin said.
According to her, they were only able to fill half of the allocation for “A sugar” or US sugar quota.
“We have about 70,000 metric tons (MT) of sugar, which have been reallocated for domestic use. We need to make sure that there is a readily available sugar for our use,” the SRA chief said.
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.
“We have already informed our counterparts in Washington, and they understand our situation,” Martin said, adding that non-completion of US quota will not affect future commitments.
As of June 1 this year, the country’s total raw sugar production for crop year 2014-2015 was estimated at 2.31 million MT–lower than the initial projection of 2.5 million MT.
“We are about 130,000 MT short of our target. We have only two mills still operating and we are already at the end of this cropping season,” Martin noted.
Meanwhile, she said they do not expect retail prices of sugar to increase for the rest of the year because there is enough sugar in the market.
“In fact, millgate prices fell to P1,600 per 50-kilo bag this week from P1,700 two weeks ago,” Martin added.
SRA is empowered to establish and maintain a balanced relationship between sugar production and the requirements of sugar in order to maintain marketing conditions that will ensure stabilized prices at levels reasonably profitable to producers and fair to consumers.