AFTER six years as a net exporter, Manila is likely to import sugar this year at a higher volume than earlier expected given tight supply caused by the prevailing dry spell, the Sugar Regulatory Administration (SRA) said on Thursday.
Ma. Regina Bautista-Martin, SRA administrator, said they are now studying schemes to augment domestic supply as more sugarcane farmers and millers are reporting a drop in their sugar production.
“El Nino has significantly affected our sugarcane production. The lack of rain has diluted the sweetness of the standing crops, resulting in lower volume of the sugar milled,” Martin said in a telephone interview.
In the first nine months of 2015, sugarcane production dropped by a hefty 41.8 percent, which was attributed to unfavorable weather conditions that affected major sugarcane plantations, particularly in the Visayas Region.
In Negros Occidental alone, there was a notable decrease in the area harvested for canes intended for centrifugal sugar production because of El Nino. The prolonged drought also caused stunted canes.
In Mindanao, some farmers shifted from sugarcane farming to cultivation of banana and rubber.
The SRA chief said that the additional sugar imports will help maintain a healthy buffer stock as local exporters and traders attempt to fulfill Manila’s commitment to export sugar to Washington under the tariff quota scheme.
The Philippines is one of the select countries given an annual allocation of sugar exports to the US market at a premium.
For this crop year, Manila has a regular US sugar quota of 135,508 metric tons (MT). Washington allowed the Philippines to retain its regular quota despite being able to fill only half or 70,000 MT of the US sugar quota in the previous crop year.
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 predetermined threshold to a higher tariff.
For the current crop year that began September 2015 and ends August 2016, the regulator said they expect sugar production to reach 2.25 to 2.35 million MT, while local consumption was pegged at 2.2 million MT.
But Martin said supply could be tighter than expected, citing the latest field monitoring in major sugar producing provinces.
“We are expecting a drop from our previous production target. That’s why we are now looking at increasing our sugar imports to replace the volume that would be shipped out to the United States, as well as ensure that we have enough supply for our domestic market,” she said.
The Philippines has not imported sugar and has remained a net exporter in the past five years.
“However, it is to the national interest that the Philippines export to the US under its sugar quota allocation while ensuring sufficient supply for the domestic market,” Martin said.
At present, traders can import 1.25 MT of sugar for every 1.0 MT exported.
“What we want to do is to adjust the export-import ratio from 1.25 MT to about 1.50 MT to ease pressure on supply,” Martin said.
She added that authorized traders will start export of 50,000-60,000 MT of sugar to the United States this week, adding that they expect to fulfill the entire US sugar quota by next month.