The Philippines is set to import up to 200,000 metric tons (MT) of sugar amid strong calls from local manufacturers following the surge in domestic sugar prices.
Agriculture Secretary Emmanuel Piñol said the Sugar Regulatory Administration (SRA) agreed to proceed with the importation by the private sector to curb the continuous price increase of the commodity.
“The SRA Board has already approved the resolution and imported sugar is expected to arrive the soonest possible time. Our shortage is between 160,000 to 200,000 MT so it will be within that range,” Piñol told reporters on June.
The SRA noted that local sugar production declined by 15 percent this month as compared to the same period last year, just as the demand rose after drinks sweetened by high-fructose corn syrup were taxed P12 per liter under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
The last time the Philippines imported sugar was in 2016 following the slump in production as an effect of the El Niño phenomenon. During that time, 100,000 MT of sugar from Thailand were brought into the country. This will be the first time in more than two years that traders and millers from the Philippines will be allowed to import sugar from other countries.
On June, Sugar Regulatory Administration (SRA) released Sugar Order (SO) No. 10, which ordered the importation of 100,000 metric tons (MT) of bottlers’ grade refined sugar; 50,000 MT of standard grade refined sugar; and another 50,000 MT of raw sugar for domestic tolling or direct consumption.
An SRA official said that the Philippines will likely source these new stocks from Thailand, given the previous deals the country had with them in terms of sugar imports.
The private sector sought the government’s approval to allow the importation of sugar, with the long term solution of allowing everyone to bring in sugar to assure stable supply, enhance free competition, and ensure a level playing field. SRA will be accepting applications for import allocations from prospective sugar traders starting June 18 until August 31.
“Traders said they can bring in the new supply [from Thailand] within seven days,” the source further said.
For this particular importation, the SRA requires eligible sugar traders to have Certificate of Reclassification Rights (CORR).
Reclassification rights shall refer to the right to reclassify imported ‘C’ sugar to ‘B’ sugar. ‘C’ sugar is considered Reserve Sugar and for other purposes. Mill gate sugar prices have jumped 44 percent to P1,802 per 50-kilogram bag as of May 20. The wholesale prices of raw, washed and refined sugar also went up by more than 20 percent to P1,950 to P2,550 per 50-kg.
This is significantly higher than the landed price of imported sugar of about P1,300 per 50-kg bag.
Because of the shortage, the Philippines will fail to hit its target to produce 2.27 million MT this year. A sugar crop year starts every September and ends in August.
The Philippine tariff on raw and refined sugar imports originating from ASEAN member countries is around 5 percent, while our most-favoured-nation tariff (MFN) for raw and refined sugar remains at 65 percent.