PHL freeze on US sugar exports billed as raising farm incomes


THE PHILIPPINES has suspended sugar exports to the US, which industry officials anticipate may raise farmer incomes if they devote all their production to the domestic market.

Sugar Regulatory Administration (SRA) Administrator Hermenegildo R. Serafica signed Sugar Order No. 1-A on March 29 ordering the suspension effective April 4.

The SRA order classifies all sugar output as class “B,” for domestic sale.

The new order amends the SRA’s Sugar Order No. 1 of Sept. 9, which allowed 7% of raw sugar production to be classified as “A” sugar, designated for the US.

Mr. Serafica said the impact of the La Niña phenomenon was worse than initially projected, with heavy rains and flooding in sugar producing areas such as Negros Occidental.

“Because of La Niña, sugar content in cane determined through 50-kilogram bag sugar per ton cane (LKg/TC) is substantially lower, from the 1.97 LKg/TC estimated national average for the crop year in SRA’s Pre-Milling Estimate to 1.71 LKg/TC actual national average as of March 14,” Mr. Serafica said in the sugar order.

Due to the effects of La Niña, Mr. Serafica revised the SRA’s sugar output for crop year 2020-2021 to 2.101 million metric tons (MT), a 4.1% decline versus its previous estimate of 2.190 million MT.

The sugar crop year in the Philippines runs from September to August of the succeeding year. At the beginning of every crop year, the SRA estimates sugar output and allocates quotas for domestic and export markets.

Asked to comment, Emilio Bernardino L. Yulo, SRA board member and planters’ representative, said in a mobile phone message that sugar farmers may realize more income by selling to the domestic market.

“They will have more income as (the export freeze) will increase the composite price. It will also increase the domestic sugar supply,” Mr. Yulo said.

Mr. Yulo added that the Philippines only needs to inform the US Department of Agriculture that the country will be unable to deliver its quota.

National Federation of Sugarcane Planters President Enrique D. Rojas said in a separate statement that the SRA’s decision will translate to more favorable sugar prices because producers will not need to set aside any sugar for the US market.

“This is welcome news for our sugarcane planters since traditionally, sugar output for the US market fetches a lower price that “B” sugar. I also asked the SRA to closely study the projected consumption, considering the drop in demand because of the pandemic,” Mr. Rojas said.

“Once we have a clear picture of the projected demand, we should also conduct a rigid inventory of actual sugar stocks to determine if we really have a shortage. We can ascertain the exact volume of the projected shortage,” he added.

Confederation of Sugar Producers Associations, Inc. President Raymond V. Montinola said the Philippines needs to stop shipping sugar to the US.

“We believe that due to the climate conditions and the demand shifting to raw sugar, it is necessary to stop shipping US sugar in order to meet domestic market demand, and to support our stock balance,” Mr. Montinola said in a mobile phone message.

The Department of Agriculture estimates the retail price of refined sugar to range between P48 and P60 per kilogram, washed sugar P43 and P55, and brown sugar P40 to P55.

The suggested retail price for refined sugar is P50 per kilogram, washed sugar P45, and brown sugar P45. — Revin Mikhael D. Ochave