The Sugar Regulatory Administration (SRA) said it has allowed local traders and producers to export sugar to countries other than the United States to arrest the decline in the domestic price of sugar.
The SRA issued Sugar Order (SO) 1-B, which authorized the reallocation of locally produced sugar in crop year (CY) 2016-2017. SO 1-B amended SO 1-A, issued by the SRA on January 24.
Under SO 1-B, the SRA reduced the allocation for “B” (domestic) sugar to 74 percent from 94 percent and allocated the 20 percent for “D” sugar, or those shipped to countries other than the US. The SRA maintained its allocation for “A” sugar, which is exported to the US, at 6 percent.
“Monitoring reports showed the continuing downward trend in the withdrawals of raw and refined sugar in the domestic market and for four consecutive weeks, prices of sugar continued to drop,” SO 1-B read. “Hence, there is an imperative need to take urgent measures in order to arrest the detrimental economic effects of the imbalance between sugar production and the requirement of sugar and to stabilize the collapsing price of sugar consistent with public welfare,” it added.
SRA Administrator Anna Rosario V. Paner said SO 1-B was issued following the requests made by sugar producers to make available “D” sugar to sugar food manufacturers.
“Allocating ‘D’ or World Market Sugar will help ease the pressure of expected high sugar stock inventory and help stabilize the sugar situation to benefit the public,” Paner said.
She added that the Philippines could ship to Japan and South Korea, where sugar is currently in demand. Sugar in the world market is currently pegged at P950 per 50-kilogram bag (lkg).
Despite the reallocation, Paner said, the estimated ending stock balances for CY 2016-2017 will still be higher than normal levels due to the higher-than-expected production, coupled with weak withdrawals.
The government-owned and -controlled corporation under the Department of Agriculture pegged the domestic sugar demand for the current crop year at 2.15 million metric tons (MMT).
The SRA projected that sugar output in the current crop year could reach 2.25 MMT, higher than the 2.236 MMT produced in CY 2015-2016. Based on SO 1-B, some 450,000 MT would be classified as “D” sugar.
In an interview, Paner said the Philippines remains on track in hitting the 2.25-MMT target output.
Data from the SRA showed that, as of March 12 the country’s total raw-sugar output has reached 1.913 MMT, 7.38 percent lower than the 2.065 MMT recorded last year.
SRA data also showed that, as of March 5, the domestic price of sugar is at P1,359.67/lkg, while sugar destined for the US market is at P1,344.67/lkg.