Sugar industry targets China, EU for exports

Economy

Posted on November 02, 2016

THE Philippines is seeking to access markets like China, the world’s top importer of sugar, to diversify its trade, which is heavily weighted towards the United States, an official with the sugar regulator said.

“China is a huge user of sugar, importer of sugar. If China’s stocks ever dwindle it is possible we will be able to ship to China,” Rosemarie S. Gumera, Manager III of the Sugar Regulatory Administration’s Planning & Policy Department, told reporters, raising hopes that President Rodrigo R. Duterte’s recent visit to Beijing will result in a trade agreement involving the sweetener.

She added the country has shipped to China in the past until its market was fully captured by the world’s top suppliers, Thailand and Brazil.

The United States Department of Agriculture’ Foreign Agricultural Service reported that China’s milling year 2016 to 2017 sugar production is expected to rebound slightly from 15-year lows, “as high domestic prices have encouraged expanded sugar area.”

“Production, however, is still forecast far below previous levels, and China will remain the world’s largest importer,” according to the USDA’s Global Agriculture Information Network in September, adding that it projects Chinese imports at 6 million tons in the current milling year.

Last milling year, the bulk of China’s sugar imports was sourced from Brazil, Cuba, and Thailand.

Should negotiations with China surface, Ms. Gumera said the Philippines would request for a preferential rate arrangement, the same scheme Washington grants to Manila.

The Philippines is one of the few countries given an annual allocation of sugar exports to the US market at a premium under a tariff-rate quota scheme.

Of the total 2.25 million MT production projected for the current crop year 2016 to 2017, the remaining 8% or 180,000 MT will go to the US, an increase from the usual 5% to 6% the country allocates for its US commitment

Manila has a regular US sugar quota of 138,827 MT in regular form or 142,160 MT in raw form which may increase depending on Washington’s assessment of the stability of its stocks.

Ms. Gumera also reiterated the sugar industry’s earlier plans to target the European Union for about 200,000 to 300,0000 MT worth of sugar exports.

Member States of the European Free Trade Association (EFTA) — Iceland, Liechtenstein, Norway and Switzerland — signed a Free Trade Agreement (FTA) with the Philippines in April, raising hopes for a similar deal with the EU.

Ms. Gumera said the Philippines will not sacrifice domestic demand should it come to a deal with the EU.

The SRA is aiming to hike by 2020 local average production to 70 cane tons per hectare from the average 55 cane tons in the last crop year, which it considers achievable given government support for the industry. — Janina C. Lim

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