THE Sugar Regulatory Administration (SRA) has diverted world market sugar to the domestic market in a bid to halt the sharp increase in local sugar prices and to provide enough buffer stocks at the end of the crop year.
SRA Administrator Maria Regina Bautista-Martin said the policy was adopted after consultations with sugar stakeholders such as millers, traders, and planters’ federations and associations.
Martin also said that they have assured President Benigno Aquino 3rd that all stakeholders will get their fair share of the benefits from the conversion program at their discretion.
“This will allow free market forces to prevail in the marketing of sugar,” the SRA chief said, adding that the SRA will not intervene in the negotiation process between the sugar producers (millers and planters) and the sugar traders.
Certificates of conversion rights will be issued by SRA to the sugar mills and planters associations based on verified world market sugar prices.
As of May 25, 2014, total sugar supply was slightly higher compared with the previous year.
However, domestic consumption of raw and refined sugar increased by 1.02 percent and 10.66 percent respectively, while exports of raw sugar for the United States quota and the world market climbed by 22 percent and 33 percent, respectively.
Government said the consumption figures reflected the real sugar demand figures of the domestic market following the combined efforts of the SRA, the Bureau of Customers, and the Sugar Alliance of the Philippines, to curb sugar smuggling.
They cited the tightened controls at the customs bureau as well as the strict implementation of customs rules and regulations as among the factors leading to the drop in sugar smuggling activities.
The Sugar Board projected that domestic consumption of raw and refined sugar for crop year 2013-2014, which ends in August, will reach 2.2 million metric tons and 1.1 million metric tons, respectively, or an increase of 1 percent and 9 percent, compared with the previous crop year.
With the increase in domestic demand, upward movement of domestic mill site prices was recorded from a low average of P1,411 per 50-kilo bag in January 2014 to a high average of P1,688 in May 2014.
The SRA projected a total world market export of 150,000 metric tons which fully complies with the country’s US quota of 136,000 metric tons, leaving a balance of more than 10,000 metric tons of world market sugar.
When the conversion of world market sugar to domestic market sugar is implemented, it is estimated that total buffer stocks of raw and refined sugar for the domestic market will be around 275,000 metric tons, higher than the standard buffer stock level of 250,000 metric tons every end of the crop year.
Buffer stocks of US quota sugar and world market sugar will also be maintained at around 22,000 metric tons and 10,000 metric tons, respectively, to supply foreign buyers and the US quota commitment during the lean months of sugar production.