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Food processors vie for 2% PHL excess sugar


Local food processors and exporters seeking to purchase sugar at world prices but without the 38 percent tariff have again appealed to the Sugar Regulatory Administration to give them access to 2 percent of local sugar output. Philippine Food Processors and Exporters Association chairman Edward David said they have been petitioning the government for the 2 percent allocation through three administrations of the SRA. The SRA has four allocation categories or quedans: A, B, C, and D. A quedan or A sugar is the annual US quota, B sugar is for domestic consumption, C quedan is reserve sugar, and D sugar is the sugar allocated for the world market and for local food processors and exporters. Using the D allocation, food processors and exporters could be allowed to purchase sugar at the prevailing world price but minus the tax burden. Among the top industry consumers of sugar are those in beverage production and baking. The SRA said it is considering exporting the production surplus to the world market or just to Asia. Agriculture Secretary Proceso J. Alcala said the sugar harvest in crop year 2010-11 hit 2.39 million metric tons (MT) or 21.3 percent more than the previous year, and that this year at least 300,000 MT will be exported. Baseline harvest goal “We have been making great strides in sugar production the past year. This may very well be the start of the country producing more than enough to meet its domestic requirements and quota obligations, but also to ensure that sugar farmers have a reasonable, sufficient, and ‘livable’ income," Alcala recently said at the 17th Asia International Sugar Conference in Cebu. This year’s harvest is the baseline goal for the following year. “We look forward to building from these gains next year, as more farms are planted and program interventions continue for CY 2011-2012," Alcala added. Expectations of good weather until the March 2012 harvest were a key assumption of the production outlook. With the bumper harvest, raw sugar supplies increased to at least 623,500 MT. Raw sugar consumption declined to 1.5 million MT this year from 1.8 million MT. Consequently, the price of raw sugar fell from a high of P2,480 per 50-kg bag to P1,300. Refined sugar consumption dropped by 31 percent to 655,840 MT, leaving a balance of more than 300,000 MT. Prices of refined sugar also dropped from a high of P2,600 per 50-kg bag to about P1,950 per bag. — ELR/VS, GMA News