Local producers plan to resume exporting raw sugar to the US under the country-specific tariff-rate quotas (TRQ), the Sugar Regulatory Administration (SRA) said over the weekend.
SRA administrator and chief executive Pablo Luis Azcona said several stakeholders broached the idea to resume the quota commitment to the US on concerns the Philippines might lose its yearly allocation.
The US Trade Representative gave the Philippines an allocation of 145,235 metric tons of raw cane sugar under the US TRQ for fiscal year 2024. The USTR announced the country-specific and first-come, first-served in-quota allocations on imported raw cane sugar in July 2023 for the period Oct. 1, 2023 to Sept. 30, 2024.
TRQs allow countries to export specified quantities of a product to the United States at a relatively low tariff.
“It will be hard to lose the US market because the US market is a premium market compared to the world market. A time may come when we’ll have surplus production, but we won’t have an export market where we can bring our sugar. I think even though we are running at a deficit every year, it will be best to keep our sugar trade with the US,” Ascona said.
“So I told these people who brought up the idea to come up with a very good proposal, and if we are to export, it should not affect the farmgate price,” he said.
Ascona confirmed, however, the government might face criticism if it allowed sugar exports when the Philippines was also importing the sweetener to augment local supply.
The SRA plans to issue another order for the importation of purely retail sugar to beef up domestic supply. The importation, Azcona said, would help stabilize local prices at about P85 per kilogram.
The agency earlier issued Sugar Order No.7 involving 150,000 metric tons, with 30,000 MT already in warehouses, while the balance is expected to arrive soon.
Sugar prices fluctuated from a low of P85 per kg. to a high of P110/kg in recent months.
Azcona said the global sugar supply was expected to remain tight, as Thailand, the world’s second biggest exporter, projected slower output because of bad weather.
Brazil, the world’s largest producer and exporter, does not export to Asia because of geographical challenges.
Meanwhile, India announced it would not export sugar because of its own supply issues and might even import about 1 million MT.
“This means, prices of global sugar will constantly go up,” Ascona said.