Manila: The Sugar Regulatory Administration (SRA) has extended an offer to export raw sugar to the United States, addressing a portion of the country’s trade allocation to the Western nation, reported Philstar.
SRA administrator Pablo Luis Azcona stated that six to eight producers, millers, and traders have volunteered to supply 30,000 to 60,000 metric tons (MT) of raw sugar to the US market.
Azcona said that some traders and producers are ready to serve part voluntarily, if not the whole, of the US market.
On an annual basis, the US establishes a minimum in-quota allocation as part of its commitment to the World Trade Organization. For the current crop year, spanning from Oct. 1, 2023, to Sept. 30, 2024, the US has allocated 145,235 metric tons of raw value (MTRV) of sugar to the Philippines, consistent with the previous year. However, the Philippines has not utilized its allocation for the past three years due to insufficient raw sugar production to meet domestic demands.
In response to the projected 10 to 15 percent decline in sugar production caused by the El Niño phenomenon for the crop year 2023-2024, the SRA has allocated the entire sugar output for domestic use (‘B’ allocation).
Facing this situation, the SRA initially requested a moratorium on the country’s in-quota allocation to the US from the US Department of Agriculture (USDA) in September. However, with volunteers ready to serve the US market, Azcona informed that the SRA has written to the USDA again, seeking clearance for the group of traders, millers, and producers to partially fulfill the allocation with raw sugar obtained directly from local farmers.
Azcona noted, “Once the US gives us a signal to export, then the exporters will do it right away.”
However, for the export of sugar to the US market, the SRA board’s approval is necessary to convert “B” sugar to “A” sugar. Azcona clarified, “We will bring this up to the SRA board and then we will decide and then issue the appropriate sugar order.”
The matter has been discussed in the recent SRA board meeting, with Azcona assuring that efforts are being made to ensure that the initiative does not adversely affect farmers and millers.
The Philippines’ last shipment of raw sugar to the US market occurred during the crop year 2020-2021, involving 112,008 metric tons of commercial weight (MTCW) of raw sugar. The US implements tariff rate quotas (TRQ), allowing certain countries, including the Philippines, to deliver specified quantities of a product to America at a relatively low tariff. However, imports exceeding a predetermined threshold are subject to higher tariffs.
