Sugar agency pushes classification swapping

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The Sugar Regulatory Administration (SRA) has allowed the advance swapping of unshipped “A” sugar or US quota sugar into “D” sugar or world market sugar to address the slow down in the export of the sweetener to Washington.

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In Sugar Order 9, SRA Administrator Ma. Regina Bautista-Martin said that the United States market is currently saturated brought by surplus from Mexico, which resulted in a significant carry-over volume of US quota sugar in local warehouses.

“As such, the US Department of Agriculture declared that the Philippines shall not be penalized if it does not export the entirety of its regular sugar quota for the current crop year,” Martin said in the order.

The Philippines has a regular sugar quota to the United States (US) of 138,827 metric tons (MT) for the current crop year. However, as of July 23, only 53,000 MT of sugar has been shipped to the US.

Earlier, various sugarcane farmers’ federations and sugar millers association—collectively accounting for more than 80 percent of the sugar produced in the country—have asked the SRA to decongest sugar warehouses before the start of crop year 2013 to 2014, and prevent overstocking.

In order to dispose their remaining stocks, which have been committed under the US quota, Martin said that the agency is now allowing advance swapping of “A” sugar to “D” sugar.

The order states that application for advance swapping of “A” sugar quedan permits issued for crop year 2012-2013 to “D” sugar quedan permits shall be entertained not later than August 22, while permits applied for advance swapping shall be charged an advance swapping fee of P5 per 50-kilogram bag.

To ensure the shipment and replenishment of the swapped “A” sugar, the applicant shall post a replenishment bond of P30 per 50-kilogram bag, representing the price differential between the price of “D” and “A” sugar.

The bond shall be posted upon submission of the “A” quedan permits for processing. This will be returned to the applicant upon compliance with shipment deadlines and replenishment rules.

Applications for replenishment of the swapped “A” sugar should be made not later than March 31, 2014.

All holders of swapped “A” sugar to “D” shall be required to submit a notarized undertaking to ship, which shall be filed not later than August 30, 2013. US quota sugar swapped into world market sugar must be shipped out of the Philippines not later than October 15, 2013.

Failure to comply with the shipping deadline will result in forfeiture of the exporter’s replenishment rights. However, the unshipped sugar remains as “D” sugar and must be shipped out not later than December 15, 2013.

The application for advanced swapping shall be filed at the SRA office in Quezon City.

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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