The Sugar Regulatory Administration (SRA) said it has permitted traders and millers to export more sugar to the US until August 31 this year to stabilize domestic supply and prices.
In Sugar Order (SO) 4, the SRA authorized the advance swapping of “B” or domestic sugar to “A” or sugar for the US market in crop year (CY) 2016-2017, which will end on August 31.
“An early shipment of US quota sugar will help ease the pressure of high sugar stock inventory in the country, and help stabilize the sugar situation,” SRA Administrator Anna Rosario V. Paner said in SO 4, which was published on the agency’s web site
on March 14.
The SRA earlier increased the sugar allocation for local consumers and industries via SO 1-A. The allocation for “B” sugar was increased to 94 percent, from 92 percent, while that of “A” sugar was cut to 6 percent, from 8 percent.
The agency 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 CY, which started in September 2016, could reach 2.25 MMT, higher than the 2.236 MMT produced in CY 2015-2016.
Paner said the advance swapping of domestic sugar to US sugar is open to all sugar producers, millers, traders and holders of outstanding quedan-permits
“All outstanding ‘B’ sugar quedan-permits issued in CY 2016-2017 are hereby allowed [eligible], on a voluntary basis, for advance swapping into ‘A’ or US Quota Sugar for quota years 2016-2017,” SO 4 read.
Paner said B quedan-permits that will be swapped to A will be charged a fee of P5 per 50-kilogram bag (lkg-bag).
She said the advance swapping of quedan-permits will be allowed until April 30.
The SRA chief also said the “B” quedan-permits that were advanced-swapped to “A” in CY 2016-2017 will be allowed replenishment starting September 1, 2017, until August 31, 2018.
Only those sugar traders who actually exported to the US market using their advanced-swapped “B” quedan-permits to “A” will be eligible for replenishment, Paner added.
“The ‘B’ quedan-permits that were advance-swapped to ‘A’ quedans shall be replenished at a ratio of 1.1 lkg-bag of ‘A’ quedans for every 1.0 lkg-bag of ‘B’ quedans,” she said.
“The ‘A’ quedan-permits subject of replenishment shall be charged with a replenishment ree of P5 per lkg-bag,” Paner added.
Earlier, Paner said the decline in the millsite price of sugar could be attributed to the increased entry of high-fructose corn syrup (HFCS) in the country last year.
“There has been a lot of excess corn in China, so the price of HFCS went down and then China exports to us at zero duty,” Paner said. “That’s why the price of sugar is dropping because there’s so much supply due to the importation of HFCS.”
She said the volume of HFCS imported last year, pegged at 285,000 metric tons (MT), which is equivalent to some 5.7 million lkg-bag, was the highest since 2013. Paner said this displaced nearly 30 percent of the market share for locally produced
refined sugar.