Philippines returns to US sugar market

Ships 25,300 MT raw sugar

MANILA, Philippines — The Philippines has officially returned to the US market after shipping 25,300 metric tons (MT) of raw sugar yesterday as part of the government’s measure of balancing out local supply to ensure stable profit for sugarcane planters.

The loading of the raw sugar bound for California on bulk carrier Tate J was completed just before midnight yesterday, after being delayed because of erratic weather.

The Sugar Regulatory Administration (SRA) said the shipment would arrive in the US within 22 days, well within the deadline of Sept. 30 for sugar imports under the country’s tariff-rate quota (TRQ) system.

The Philippines is one of the beneficiaries under the US’ TRQ system that allows the entry of imported commodities at a relatively lower tariff rate.

“This will balance out the supply of raw sugar in the country when we start milling by the end of this month,” SRA administrator and CEO Pablo Luis Azcona said.

Last month, the SRA board issued Sugar Order 3 that formalized the reallocation of some locally produced raw sugar for export to the US.

This is the first time the Philippines is fulfilling its trade obligation after two straight crop years of not shipping a single volume of raw sugar to the US market due to lackluster production.

Since crop year 2020-2021, the Philippines has been unable to export raw sugar to the US after its domestic output fell below its overall demand.

The shipment of raw sugar to the US is part of government efforts to lift domestic farmgate prices of the commodity, by siphoning off some of the country’s supply amid a drop in market demand.

In a related industry development, local sugar millers are opposing any plans to reduce the country’s tariff on imported sugar from the United Arab Emirates through a proposed trade agreement.

The Philippine Sugar Millers Association (PSMA) voiced out their opposition during a recent Tariff Commission hearing, saying that the government should not give in to requests to cut the country’s sugar tariffs as part of the Comprehensive Economic Partnership Agreement.

PSMA executive director Jesus Barrera explained that the UAE has one of the biggest sugar refineries in the world and allowing their shipments to enter the Philippines at lower tariffs could be detrimental to the domestic sugar industry.

“The capacity of one of their refineries is about 1.5 million metric tons which is already equivalent to the capacity of our whole industry,” Barrera said.

Trade officials confirmed during the Tariff Commission hearing that the UAE is keen on reducing the tariffs imposed by the Philippines on refined sugar.