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DA-SRA eyes sugar exports to ease supply glut in 2021

Author: DA Communications Group | 21 August 2020

The Department of Agriculture’s Sugar Regulatory Administration (SRA) is considering to export surplus sugar for the crop year 2020-2021, preferably to the United States, to stabilize prices and supply.

In his report to Agriculture Secretary William Dar, SRA Administrator Hermenegildo Serafica said they are studying the possibility of exporting surplus sugar to the US to take advantage of Washington’s preferential rate.

“We forecast that we will have excess sugar this crop year 2020-2011, which will need to be exported,” Serafica said.

“We expect to produce 2,190,190 million metric tons (MMT) of sugar for crop year 2020-2011, higher than the previous year’s output of 2,145,693 MMT,” the DA-SRA chief added.

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

Earlier, local sugar producers urged the SRA to scrap sugar exports to the world market to ensure that the country will have enough sugar during the current COVID-19 pandemic.

Serafica, however, said that maintaining high stock inventory would only result in depressed prices, especially now that sugar consumption and withdrawals from warehouses have slowed down.

He said that the demand for sugar is greatly reduced as there has been a limited operation of manufacturers of sugar-containing products, such as beverage companies as well as industrial and institutional consumers like restaurants, most of which are not fully operational.

“Export of domestic sugar will ease and help stabilize prices — at levels that are reasonably profitable to producers and fair to consumers,” he added.

The Philippines has not allocated sugar for non-US markets for several years now, while the US remains as the top destination of local sugar because of better prices compared to the world market, Serafica said.

The country, which has been a consistent and reliable sugar exporter, 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.

In the previous crop year 2016-2017, the Philippines had a US quota of 136,827 MT. The volume may increase depending on Washington’s requirements during a particular season.

Tariff-rate quotas allow countries to export specified quantities of a product, like sugar, to the United States at a relatively low tariff. ### (DA-SRA & StratComms)

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