SRA to adjust sugar allocations

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The Sugar Regulatory Administration (SRA) on Friday said that it may adjust sugar allocations for the next crop year to address the slower shipments of the sweetener to the United States.

SRA administrator Ma. Regina Bautista-Martin said that the Philippines still maintains its net sugar exporter status, but stressed that shipments to the United States may continue to decline until the next crop year from oversupply that resulted in very low prices of “A” or US quota sugar.

“Right now, Philippine sugar is not attractive as compared to our Mexican counterparts, who enjoy zero-tariff and zero-quota to sugar being sold to the US,” Martin said.

Manila has a regular US sugar quota of 138,827 metric tons (MT) this year.


But the country was only able to ship out 27,160 MT of sugar to the US, while another shipload of 23,600 metric tons is set to leave by the end of June. A third and final shipload is being worked out by exporters, she said.

“That is why we are now considering various options we can take to dispose the remaining volume, which has been committed to US sugar quota,” Martin said.

Martin said that they are considering an early shipment to Washington, while at the same time, lowering allocation for US sugar quota for the next crop year.

Another option, she said, is to allow the conversion of “D” or world market sugar to alternative feedstock for biofuels.

“It is possible that the ’D’ sugar, which is exported, will instead be bought by biofuel producers,” she said.

In a separate interview, SRA Board Member Jesus Barrera said that the target export volume of 180,000 MT to the world market would be attained this year, with 141,000 MT set out for shipment as of June.

Increased sugar production
As of June 2, sugar domestic production reached 2.448 million MT, 0.6 percent higher than SRA’s second production estimate of 2.434 million MT for crop year 2012-2013.

“This will further increase as three mills are still grinding and some mills that earlier stopped milling are set to restart by early August,” he said.

Increase in sugar production may be attributed partly to the increase in area planted to sugarcane, about 4,000 hectares more and by favorable weather conditions which gave better sugar yield and cane tonnage.

Martina, on the other hand, said that domestic consumption of raw and refined sugar has increased by 15 percent and 9.5 percent, respectively. Thus, raw sugar stock balance is 2.65 percent lower, while refined sugar stock balance is 12.72 percent higher compared to the same period of the previous crop year.

“High demand of sugar-based products during the election season, stable domestic prices, and the intensified antismuggling efforts of the current administration in partnership with the private sector have triggered the increase in the domestic consumption of sugar,” Martin added.

The average millsite prices of “A” or US quota sugar in May 2013 is P643 per 50-kilo bag compared to “D” or world market sugar which is P715 per 50-kilo bag; while “B” or domestic sugar is P 1,435 per 50-kilo bag which translates to a composite price of P1,298.
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.

James Konstantin Galvez

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