Philippines to export more sugar to US

September 3, 2020
Louise Maureen Simeon (The Philippine Star) |

MANILA, Philippines — The Philippines is set to export more sugar to the United States to balance local supply due to an expected hike in output in the new crop year.

In its first sugar order for the new crop year, the Sugar Regulatory Administration (SRA) allocated 93 percent for the “B” or domestic sugar market and the remaining seven percent for  “A” or US market.

A sugar crop year in the Philippines starts in September and ends in August of the following year.

The SRA classifies sugar into “A” for sugar for export to the US, “B” for domestic consumption, “C” for reserves, “D” for export to countries other than the US and “E” for local food processors.

Last crop year, the Philippines only allocated five percent for  the US market.

The  higher allocation is based on forecast that the Philippines will have excess sugar for  crop year 2020 to 2021.

Expected production is  2.19 million metric tons based on more sugarcane area validation, analysis of historical productivity index, and weather related productivity through climate outlook until January 2021.

This is two percent better than the 2.15 million MT produced  in the recently concluded crop year.

The SRA has projected that withdrawals for the new crop year would reach 1.98 million MT, taking into consideration the historical trends and the COVID-19 situation.

With the higher production and carry-over stock of about 268,906 MT, total projected raw supply is seen at 2.53 million MT.

According to the Office of the US Trade Representative,  the Philippines was given a sugar quota of 142,160 metric tons raw value (MTRV) or 136,201 MT commercial weight. This is the same volume allocated to the country in the last four years.

The US remains as the top destination of local sugar because of better prices compared to the world market.

The Philippines is one of the select countries given an annual allocation of sugar export to the US market at a premium under a tariff-rate quota.

TRQs allow countries to export specified quantities of a product like sugar to the US at a relatively low tariff.

The SRA is mandated to maintain a balanced relationship between sugar production and the requirements of sugar, and maintain such marketing conditions to ensure stabilized prices at levels reasonably profitable to producers and fair to consumers.