The Sugar Regulatory Administration (SRA) on Friday said it is considering the importation of an additional 50,000 metric tons (MT) of sugar to ensure that the supply and price of the commodity remains stable.
SRA Administrator Ma. Regina Bautista-Martin said this is above the 170,000 MT initially approved by the agency to replace the volume exported by the Philippines to meet its US quota.
“[The SRA] is studying the need for additional sugar imports over and above the replacement imports to ensure a healthy buffer stock and to temper speculation [and keep traders from trying to raise the price of sugar in the market],” Martin said.
Martin added that the SRA still needs to closely monitor the local production of sugar before their importation plan could be finalized.
She added that the Sugar Board is also studying if the country can ship the additional allocation given by the US Trade Representative under the tariff-rate quota (TRQ) scheme.
Washington, D.C., earlier provided Manila with an additional 12,194 MT of raw-sugarcane allocation on top of its 135,508 MT original quota.
“The board is studying this offer and we shall decide next week,” Martin said.
Philippine Sugar Millers Inc. President Francisco Varua earlier told the BusinessMirror the industry may not be able to fill up the additional quota as this would be too costly for traders.
“The [12,194 MT] volume cannot fill up a boat, since chartered ships would normally be in the category of 25,000 to 30,000 tons. To charter a vessel of 12,000 tons would cost expensive dead freight,” Varua said.
Meanwhile, the SRA reported that the country has already shipped 135,508 MT to the United States, filling up the regular quota under the SRA’s export-replacement sugar.
“The fifth vessel departed only last Holy Thursday. Exports were done during the peak of the production from January to March,” Martin said.
A total of 96,000 MT of replacement imported sugar have already been issued release clearances by the SRA. Martin said the balance of replacement sugar is expected to arrive in May.
Data from the SRA showed that as of March 20, the country’s raw-sugar production declined by 6.53 percent to 1.86 million metric tons (MMT) from the 1.99 MMT recorded in the same period last crop year.
Philippine sugar output for the current crop year is expected to reach 2.14 MMT, 8 percent lower as compared to the 2.32 MMT achieved in Crop Year 2014 and 2015. The drop in production is due to “unfavorable” weather conditions and reduction of sugarcane areas.
“Millgate prices have remained firm as the market continues to speculate that the supply may be tight towards the end of the crop year as weekly production has started to decline. Speculation is further fueled by the scenario of a delayed milling season next crop year due to the continued effects of El Niño,” Martin said.