Sugar millers: PHL can't meet higher US demand

Filipino sugar millers won't be able to meet additional quota allocation from the US next year, because of higher demand from other countries and lower production forecast for crop-year 2011. Despite Washington's request for higher sugar quota for the Philippines next year, the Southeast Asian nation will likely keep its original volume of 137,000 metric tons (MT), Filipino sugar millers said Tuesday. The millers also expect higher demand for the commodity from other markets that will keep the supply situation for crop-year 2011 tight. "We intend to service only the [existing US] sugar quota at this time," said Archimedes Amarra, executive director of the Philippine Sugar Millers Association, Inc. (PSMA), during a presentation on prospects for the sugar sector next year. Under the US tariff rate quota (TRQ), the Philippines shipped out 170,957 MT of the commodity for fiscal year 2010. "The initial quota of the Philippines was 136,201 MT," Amarra said. "The US government increased it by 11,215 MT and by another 25,000 MT. [Still, Washington] requested for another 25,000 MT but we could no longer comply." The additional 11,215 MT was supposed to make up for the volume that other countries were not able to supply under the revised TRQ allocation scheme. By April 1, Washington is expected to announce any additional quota. For the crop year ending Aug. 31, 2011, the Philippines expects to produce 1.96 million MT or 1 percent less than the 1.97 million MT it produced in crop year 2010. Of the Philippines’ 2010 output, 7 percent was designated "A" sugar for the US market. "We retain the US market as sugar is bought at a better price, usually an additional 10 cents a pound," Amarra said. The Philippines usually imports sugar to cover production shortfalls and to meet the US quota. The Filipino sugar millers, however, noted that importing sugar may no longer be feasible given the higher prices in the international market. Because of increased demand from China, Russia, Indonesia, and Bangladesh, Amarra said the supply from crop-year 2011 will be tight. "China’s situation is worth a special note. The country’s overall import demand is expected to exceed 3 million MT. Historically, China’s imports have never exceeded 1.5 million MT," he added. — VS/TJD, GMANews.TV