Tuesday, 8 April 2008

RP sugar output in excess

By Othel V. Campos
The Manila Standard
http://www.manilastandardtoday.com/?page=business1_april7_2008

The Sugar Regulatory Administration has raised the projected sugar production level this year to 2.34 million metric tons, or an excess of 140,000 MT.

“Based on our production and consumption estimate, the President and the Filipino consumers need not worry of the supply of sugar,” said SRA administrator Rafael Coscolluela.

The agency has been revising sugar production from time to time based on the dynamics of the industry.

It estimated sugar output in February to reach 2.289 million MT from 2.8 million MT at the start of the crop year.

“From time to time, we revise our targets and allocation based on the prevailing situation. Like now, it is peak milling season, so we increased the allocation for C sugar [reserve] so as not to flood the market and depress the prices. These are all part of the internal dynamics of the industry, sugar being a sensitive commodity,” said Coscolluela.

Philippine Sugar Millers Association Inc. said the slight production surplus would save the government millions of pesos from importation and ensure availability of the commodity to consumers.

“Exposing sugar producers to unfair competition from subsidized imported sugar through tariff reduction puts the Philippines in a precarious situation. When production drops due to depressed prices, the country might not experience the same situation it is encountering right now. We might have to worry about sugar and not just rice. That situation is socially and politically unimaginable,’ said association executive director Archimedes Amarra.

The Philippines is expected to buy as much as 2.2 million tons rice this year, the highest level in 10 years.

The Philippines has been self-sufficient in sugar in the last five years, unlike rice and corn, which it partially imports to fill in a domestic shortfall.

Beginning crop year 2002-2003, the SRA noted an average surplus production of 102,000 MT per crop year.

“We’ve been telling the government that we can sufficiently supply the market. But we also ask them to give us tariff protection from subsidized sugar,” said Hernando Trebol of the Confederation of Sugar Producers Association Inc.

The group earlier sought help from the government to delay tariff reduction on all sugar products. Effective tariff is expected to go down to zero to five by 2010 from the current 38 percent under the Asean Free Trade Area-Common Effective Preferential Tariff scheme.

Afta is a free trade arrangement that seeks to increase Asean’s competitive edge as production base in the world market through the elimination of tariffs and non-tariff barriers.

Producers are seeking an extension of the present tariff regime beyond 2010 or until such a time that domestic stakeholders have regained their competitiveness.

Sugar producers have asked the government to negotiate for the re-classification of raw and refined sugar as a “highly sensitive” product to allow the Philippines to delay the reduction of tariffs.

Raw and refined sugar in 2001 was moved to the so-called “sensitive list” from the temporary exclusion list, allowing the phasing-in of tariff reductions for Philippine sugar products under the Afta-CEPT.

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