SUGAR production for the next crop year could decline by 2 percent to 2.27 million metric tons (MMT) from 2.31 MMT recorded in the 2014-2015 crop year, the Sugar Regulatory Administration (SRA) said on Thursday.
In Sugar Order (SO) 1 it issued on August 26, the SRA said sugar output for crop year 2015-2016, which will start on September 1, could be lower due to the “unfavorable weather conditions” and reduction of sugarcane areas.
The projected sugar output for crop year 2015-2016 is just enough to supply the domestic market’s requirement for sugar pegged at 2.25 MMT.
This forced the SRA to allocate the entire output for the next crop year to the domestic sugar market. SO 1 did not specify any volume for the “A” classification or sugar destined for the US market and for “D” classification or those for export to other countries.
“The SRA will conduct periodic assessments of CY 2015-2016 sugar production and withdrawal trends, and may, from time to time, adjust the percentage of its sugar distribution for the domestic and world market,” SRA Administrator Regina Bautista-Martin said i n SO 1.
Martin said the SRA will determine how it can fill the sugar quota given by the US under the tariff-rate quota (TRQ) scheme.
“We will export to the US from our domestic supply. Right now the SRA is finalizing the mechanism. We will announce this next month,” she said.
Manila received a total sugar allocation of 142,160 metric tons (MT) from Washington for the upcoming crop year under the TRQ scheme.
TRQs allow countries to export specified quantities of a product to the US at a relatively low tariff, but subject all imports of the product above a predetermined threshold to a higher tariff.
In June the SRA announced that it has decided to temporarily stop the shipment of sugar to the US and other countries in its bid to secure domestic supply, as local sugar-cane production fell below target.
The agency made the decision after it adjusted its sugarcane production forecast for crop year 2014-2015 downward due to the dry spell caused by the El Niño weather phenomenon. The government had initially projected sugar output to settle at 2.5 MMT for the 2014-2015 crop year, which will end on August 31.
The SRA, an attached agency of the Department of Agriculture, has been tasked to ensure that sugar prices are “at levels reasonably profitable to the producers and fair to consumers.”