Sugar regulatory body eyes exporting supply surplus to stabilize prices

The Department of Agriculture's Sugar Regulatory Administration is considering exporting surplus sugar for crop year 2020-2021, preferably to the United States, in a bid to stabilize prices and supply.

In a statement, SRA administrator Hermenegildo Serafica said the agency is studying the possibility of exporting surplus sugar to the US to take advantage of Washington’s preferential rate.

“We forecast that we will have excess sugar this crop year 2020-2011, which will need to be exported,” Serafica said.

"We expect to produce 2,190,190 million metric tons (MMT) of sugar for the crop year 2020-2011, higher than the previous year's output of 2,145,693 MMT," the SRA chief added.

A sugar crop year in the Philippines starts in September and ends in August of the following year.

Earlier, local sugar producers urged the SRA to scrap sugar exports to the world market to ensure that the country will have enough sugar during the current COVID-19 pandemic.

Serafica, however, said that maintaining high stock inventory would only result in depressed prices, especially now that sugar consumption and withdrawals from warehouses have slowed down.

He said demand for sugar is greatly reduced as there has been limited operations of manufacturers of sugar-containing products, such as beverage companies as well as industrial and institutional consumers like restaurants, mostly of which are not fully operational.

"Export of domestic sugar will ease and help stabilize prices --  at levels that are reasonably profitable to producers and fair to consumers," he added.

The Philippines has not allocated sugar for non-US markets for several years now, while the US remains as the top destination of local sugar because of better prices compared to the world market, Serafica said.

Being a consistent and reliable sugar exporter, the Philippines is one of the select countries given an annual allocation of sugar export to the US market at a premium under a tariff-rate quota.

In the previous crop year 2016-2017, the Philippines had a US quota of 136,827 MT. The volume may increase depending on Washington’s requirement during a particular season.

Tariff-rate quotas allow countries to export specified quantities of a product, like sugar, to the United States at a relatively low tariff. —LBG, GMA News