THE Philippines may not export any raw sugar to the US in market year (MY) 2021-2022 as the country focuses on meeting its domestic requirement for the sweetener, an international agency said.
In its latest report, the United States Department of Agriculture Foreign Agricultural Service in Manila (USDA-FAS Manila) revised its export forecast for the Philippines from 140,000 metric tons (MT) to zero.
The USDA-FAS Manila made the revision on the basis that the Sugar Regulatory Administration (SRA) decided to allocate all of the country’s raw sugar production for domestic use.
The SRA made the decision following the announcement by the state weather bureau that the reemergence of the La Niña phenomenon will coincide with the harvest and peak-milling season in key production areas. Excess water in sugarcanes results in lower sugar recovery.
“Post lowers MY 2021/22 exports to zero, following the recent SO (special order) No. 1 allocating all production to domestic consumption,” the USDA-FAS Manila said in its recently published Global Agricultural Information Network (Gain) report.
In recent years, the United States has been the sole export market for Philippine raw sugar and the Philippines receives an allocation of 142,160 MTRV (metric tons raw value) in the sugar tariff rate quota.
First since 1982
IF the USDA-FAS Manila’s forecast materializes, then it will be the first time since 1982 that the Philippines will not export any volume of raw sugar to the United States, based on historical data.
This is just the second time in the past decade that the Philippines opted to allocate all of its raw sugar production for the domestic requirement, with the last time being in CY 2015-2016. However, the Philippines still exported raw sugar to the United States back then through a replacement program.
Certain quarters of the sugar industry, such as the sugar millers, have earlier told the government that it must properly explain to the United States why it is not allocating an “A” sugar or raw sugar bound for the Western country this crop year.
This, the Philippine Sugar Millers Association (PSMA) noted, is aimed at keeping the Philippines’s preferential right to the United States sugar market. The Philippines started its sugar trade with the United States in 1796, according to the SRA.
Lower imports
GIVEN the Philippines’s current sugar policy, the USDA-FAS Manila made a lower forecast for the country’s refined sugar imports compared to the official projection of the USDA.
“Post revises MY 2021/22 imports to 100,000 MT, 34 percent lower compared to the USDA official estimate. This reflects the decision to not allocate any sugar production to exports; traders will therefore not be allowed to import refined sugar in an export replenishment program,” the agency said.
“Final MY 2020/21 data shows the Philippines imported 151,000 MT of refined sugar,” it added.
Last month, the United States still kept the Philippines’s sugar allocation of 142,160 MT raw values for fiscal year 2022, since it is one of its longest trade partners when it comes to the sweetener.
TRQ system
THE Philippines is among the countries that are allowed to export raw sugar to the United States under its tariff-rate quota (TRQ) system, which allows it to export specified quantities of products at a relatively low tariff.
The Philippines is the country with the third biggest volume allocation out of the 40 countries that are allowed to export raw sugar under the United States’ TRQ scheme.
The USDA-FAS Manila sugar production forecast for the Philippines is at 2.1 million MT, slightly lower than the 2.143 million MT recorded in the previous crop year. The USDA-FAS Manila is the same with the SRA’s initial crop year production estimate.
Domestic supply priority
THE BusinessMirror earlier reported that the local sugar sector got off to a good start as raw sugar output more than doubled nearly a month after the current CY kicked off in September, based on latest government data.
SRA data showed that raw sugar production as of September 26 reached 59,805 metric tons (MT), which was 167.62 percent higher than last year’s 22,347 MT.
The local sugar sector got off to a good start as raw sugar output more than doubled nearly a month after the current crop year (CY) kicked off in September, latest government data showed.
Data from the Sugar Regulatory Administration (SRA) showed that sugar production as of September 26 reached 59,805 metric tons (MT), which was 167.62 percent higher than last year’s 22,347 MT.
With the triple-digit growth rate in initial output, total raw sugar supply as of September 26 rose by 12.85 percent to 312,212 MT from last year’s 276,668 MT, based on SRA data.
Raw sugar demand during the period, as measured by withdrawals, was estimated at 80,869 MT, slightly higher than last year’s 80,268 MT.
Current raw sugar stocks were estimated at 210,271.23 MT, 70.02 percent higher than the 123,675.49 MT recorded a year ago.
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