Philippines may lose US sugar quota

If the United States adopts a globalized quota allocation for the importation of sugar after the review of the US Farm Bill, the Philippines may lose its sugar quota to the US under the Tariff Rate Quota (TRQ) Scheme.

This is a major concern expressed by the sugar industry, led by Philippine Sugar Millers Association (PSMA) president Archimedes Amarra.

In fact, Amarra and Sugar Regulatory Administrator Ma. Regina Martin have been in the US since last week lobbying for the retention of the US sugar quota in the medium term.

“The Farm Bill is being deliberated upon by the US Congress. Our purpose is to make sure that our interest and that of sugar is considered. We are looking at the medium term, not the immediate. The Farm Bill is being deliberated every five years and we feel we need the quota,” Amarra said.

The Philippines is one of the select countries that are given an annual allocation of sugar export to the US market at a premium. The local sugar sector exports an annual quota of 136,000 metric tons (MT) to the US.

Amarra said, however, that the US is under a lot of pressure to adopt the globalization of the quota in support of the Doha round of the World Trade Organization. The globalization of the quota means no specific allocation will be given to any particular country.

“It will be on a first come, first serve basis. The possibility is there but they are not so keen on following the Doha. Nevertheless, it could also develop into a political issue in the US and we are lobbying for our interests,” he said.

Sugar policy reform is back on the US legislative agenda, as two new bills—the Free Market Sugar Act introduced by Republican Rep. Joe Pitts and Democratic Rep. Danny Davis last Wednesday, and Republican Sen. Dick Lugar’s Free Sugar Act of 2011—aiming to end the sugar price- support program have attracted broad industry support in the US.

Lugar’s Free Sugar Act seeks to create “a free market in sugar, free small businesses and consumers from paying government-inflated food prices, and free sugar producers from the commands of Washington,” the senator said in a statement on his web site.

He noted that US sugar prices are currently at or near all-time record highs, “well above the world sugar price, forcing US consumers, small businesses.”

At the same time, the American Sugar Alliance has accused industry of trying to “flood the sugar market with subsidized imports so they can increase corporate profits.”

In 2010 the Philippines shipped out a total of 170,957 MT under the TRQ scheme after the US government increased the allocation by 11,215 MT and by another 25,000 MT.

The 11,215 MT represented the volume that other countries were unable to supply under the revised allocation scheme of the TRQ.

The country’s sugar output for crop year 2010-2011 is likely to post a flat growth of 1.96 million MT from 1.97 MMT in crop year 2009-2010. The country’s sugar crop year ends on August 31 and starts on September 1 of any given year.

On Friday sugar rose for a second day in London on speculation refined sweetener supplies may be limited.

The May futures contract in London which expires this week is trading at a premium to the August contract, indicating near-term supply may be limited.

White, or refined, sugar futures for August delivery rose $8.90, or 1.4 percent, to $664.30 a metric ton on NYSE Liffe in London on Friday. May sugar was at $713 a ton. Raw sugar for July delivery advanced 0.03 cent, or 0.1 percent, to 25.3 cents a pound on ICE Futures US in New York.

source: abs-cbnnews