This coming September, the Philippines will expect 150,000 metric tonnes of sugar. The sugar importation will cover the short supply and help establish stabilised prices.
The Necessity for More Sugar Importation
On July 6, President Ferdinand “Bongbong” Marcos Jr gave the go signal for more sugar importation. Dubbed Sugar Order 7 (SO7), the president who is also the Sugar Regulatory Administration (SRA) board chairman, approved the additional sourcing of refined sugar from overseas.
This additional 150,000 metric tonnes is the second importation program and the third for 2022-2023. The imported sugar will cater for traders and manufacturers/industrial users, wholesalers, retailers, and institutional users. The latest importation is expected to provide sufficient supply for domestic consumption and two-month buffer stock.
“Despite the release of Sugar Order 6 import program Series of 2022-2023, the further reduction of sugar production volume for Crop Year 2022- 2023 is forecasted due to early start and early end of milling; and in anticipation of the possible shortfall of supply, and to bridge the gap between the supply and the demand, the SRA finds it imperative to open a second import program to address the demand for CY 2022-2023,” the order read.
This February, SRA approved the first sugar importation for SO6 amounting to 440,000 metric tonnes. It bolstered the supply and held back the soaring sugar retail prices.
Importer’s Requirements
Importers must meet the requirements before they can engage in sugar importation. They must assure that their allotted volumes arrive in the country by September 15. Within a month of the shipments’ arrival, they must distribute their appropriations completely. Afterwards, they need to submit to the SRA written proof of compliance.
Moreover, the SRA said that the imported 150,000 metric tonnes of sugar already include the two-month buffer. This is to ensure price stability and that there’s no supply shortage in the country.
SRA will collect ₱33 clearance fee for every 50-kilo bag of imported sugar. Additionally, the regulatory board will collect ₱750 bond per 50-kilo bag for every allocation.
Impending Supply Shortage, High Sugar Prices
According to Acting SRA chief Pablo Luis Azcona, the country’s current sugar supply will last until August 31. It means that the Philippines may face a supply shortage of 50,000 metric tonnes before the milling season.
Based on the law of supply and demand, if there’s a shortage in supply, the price will go up. The country might deal with another high sugar price because of a drop in supply. It could be that there is no more supply or just being manipulated by hoarders.
On July 6, the Department of Agriculture monitored the prices of sugar products per kilo in Manila. Refined sugar sells at ₱86 to ₱110, washed sugar at ₱82 to ₱90, and brown sugar at ₱78 to ₱90.
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