SUGAR MILLERS DEFER TO SRA ON ALLOCATION DECISION
SUGAR millers have thrown their support behind any decision that the Sugar Regulatory Administration (SRA) board would make regarding the allocation of the country’s production of the sweetener in crop year (CY) 2021-2022.
The Philippine Sugar Millers Association (PSMA) submitted its position paper regarding the sugar allocation in CY 2021-2022 to SRA Administrator Hermenegildo R. Serafica last August 27.
In its letter, the PSMA explained that the majority of its members “prefer” an “A” sugar allocation or sugar that will be exported to the United States as they “believe it provides a significant and valuable mechanism to the SRA Board to manage the sugar supply of our country.”
However, the PSMA also said it is cognizant of the “special” challenges brought about by the prolonged Covid-19 pandemic to the sugar industry, as well as the forecasted continued La Niña that can adversely impact raw sugar production.
“For reasons stated, the PSMA Board has unanimously agreed to support any decision of the SRA Board on the allocations for Sugar Order [SO] No. 1 CY 20212022,” the group said in its letter, a copy of which was obtained by the Businessmirror.
The SRA issues SO 1 a day before or at the start of the CY, which is on September 1, to provide guidance to the sugar industry on the allocation of raw sugar production for the concerned crop year.
However, PSMA pointed out that any decision not to allocate an “A” sugar in the coming crop year must be a “temporary” undertaking and the SRA must explain such a decision to the US Department of Agriculture to be able to keep the Philippines’s preferential right to the US sugar market.
“PSMA emphasizes that any decision not to allocate an ‘A’ this coming crop year is TEMPORARY undertaking, only for CY 2021-22, and MUST be properly explained by SRA to the US Department of Agriculture to ensure it will not prejudice our historic and preferential right to the US sugar market or our US sugar quota, especially since US market is asking for more sugar with market prices at all-time high,” the group’s letter read.
“It is our view that access to this market through the retention of the sugar quota is strategically important to all sugar producers as a viable market option in the long term,” the letter added.
The PSMA asked the SR A Board to closely monitor the country’s sugar production to be able to make the necessary modifications of volume allocation should there be a better crop harvest.
“We also request the SRA Board to closely monitor the impact of the stated special challenges so that, if at any time in the crop year, our LKG/TC or our production is better than initially forecasted, the SRA Board must immediately be prepared to modify the allocation/s,” the group said.
The SRA’S pre-milling production estimate for the next crop year stood at 2.099 million metric tons (MMT), which was based on expectations of above normal rainfall condition from October 2021 to January 2022 in Batangas and Negros Island, which are sugarproducing provinces. The projected volume is slightly lower than the two-year sugar production average of 2.14 MMT.
“Slightly above normal rainfall” is also expected for Bukidnon from December 2021 to January next year, based on the state weather bureau’s forecast.
Despite having 158,577 MT of carry-over raw sugar stocks, the country’s sugar supply would be “better served with an all ‘B’ sugar domestic sugar allocation” for the next crop year, based on projections obtained by the Businessmirror.