AN OFFICIAL of the Sugar Regulatory Administration (SRA) has expressed support for the push for the termination of the seven-percent allocation for the US quota or "A" sugar amid the anticipated tightness in the domestic supply of the commodity.
SRA Board Member Emilio "Dino" Yulo III, representing the planters, said he is fully supportive of the stakeholders' call to terminate the current allocation for the US quota "in light of the obvious fact that we may not be able to reach our targeted sugar output for this crop year."
Yulo, in a statement, said the projected national production of 2.190 million metric tons (MT) appears to be a long shot based on simple mathematics.
Yulo said he already expressed to SRA head Hermenegildo Serafica as early as November to revisit and review the SRA estimates given the heavy rainfall experienced in Negros Occidental and with Batangas getting hit by Typhoon Quinta during that time.
"Administrator Serafica assured me in a letter that he has ordered a study as early as October and will appraise the Sugar Board about the situation but nothing happened," Yulo said, adding that "rather, the administrator reiterated through media last February his forecast that we will have excess sugar this crop year which will need to be exported."
He further said that "such a statement was quite alarming because of clear figures coming from the ground which prompted me to reiterate my reservations in my letters between January to March because it was near impossible to attain by then the initial projected national production."
Yulo said the sugar industry needs to average a 50-kilogram bag per tonnes cane (LKg/TC) of 2.22 for the remainder of the milling season to be able to attain the projected national production.
Just to be able to reach two million metric tons, the industry needs to average a LKg/TC of 1.78 for the remainder of the crop year, Yulo said.
By the end of February, figures showed that the LKg/TC continued to be mired in the 1.71 level, which makes it next to impossible to aim for the projected national production, he added.
The Confederation of Sugar Producers Associations (Confed) earlier recommended to the SRA the termination of the seven-percent allocation for "A" sugar as soon as possible.
Confed president Raymond Montinola, in a letter to SRA head Hermenegildo Serafica dated March 26, said this is an anticipation of tightness in the domestic supply.
"[Also] we support the SRA's effort to review the current allocation formula," he added.
Montinola said most of their members have increased their cane tonnage this crop year due to the heavy rainfall that prevailed since December 2020.
He said sugar recovery, however, has dropped significantly compared to last year leading the SRA to revise its crop estimate for Crop Year 2020 to 2021.
"We take note, likewise, of a rise in withdrawals of raw sugar and a drop in demand for refined as reflected in the supply and demand report of the SRA last February 28," the Confed president told Serafica.
The group believes that terminating the "A" sugar allocation would help relieve the tightness in the domestic market.
In line with this recommendation, Confed also proposed that the SRA establish a deadline for verification and shipment to the US market of all "A" sugar already quedanned.
For Yulo, the sugar producers group was right to assume that there's an expected tightness in the domestic supply as figures have clearly shown.
Aside from Confed, other stakeholders calling for the scrapping of US quota allocation include the National Federation of Sugarcane Planters, United Sugar Producers Federation of the Philippines, Panay Federation of Sugarcane Farmers, and Luzon Federation of Sugar Producers Inc.
Yulo said the handwriting is on the wall and scribbles were already seen as early as January and should have been acted upon.
"As I have repeatedly stressed in my correspondences, it is unconscionable to export if eventually, we are to import which will again prompt the resurgence of calls to liberalize which industry stakeholders have been fighting against, knowing that this will kill the sugar industry," he added.