SRA studying exporting excess sugar to US

August 21, 2020

The Sugar Regulatory Administration (SRA) is studying the possibility of exporting surplus sugar to the United States to take advantage of Washington’s preferential rate.

In his report to Agriculture Secretary William Dar, SRA administrator Hermenegildo Serafica said export of surplus sugar for crop year 2020-2021, preferably to the United States is being considered to stabilize price and supply.

“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 crop year 2020-2011, higher than the previous year's output of 2,145,693 MMT," he added.

According to SRA, the sugar crop year starts in September and ends in August of the following year.

The SRA considered exporting sugar despite the call of  local producers to scrap exports to the world market to ensure the country will have enough supply during the current COVID-19 pandemic.

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

He noted that "the 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," Serafica said.

"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," he added.

The SRA noted that "the country, which has been a consistent and reliable sugar exporter, 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 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 particularly season," it stated.

"Tariff-rate quotas allow countries to export specified quantities of a product, like sugar, to the United States at a relatively low tariff," it added. Robina Asido/DMS