|World market sugar converted to domestic market sugar to arrest price hike|
|Written by DA-OSEC|
|Tuesday, 10 June 2014 06:44|
The Sugar Regulatory Administration (SRA) implemented the conversion of outstanding stocks of world market sugar to domestic market sugar to arrest further increase of sugar prices and provide enough sugar buffer stocks at the end of the crop year.
SRA Administrator Maria Regina Bautista-Martin said the SRA implemented the policy after due consultation with the sugar stakeholders such as the sugar millers, traders and planters federations / associations.
She said that they have assured President Aquino that all stakeholders will get their fair share of the benefits from the conversion program at their discretion.
This will allow “free market forces to prevail in the marketing of sugar,” the SRA administrator added.
Martin said that SRA will not intervene in the negotiation process between the sugar producers (millers and planters) and the sugar traders.
Certificates of conversion rights will be issued by SRA to the sugar mills and planters associations based on verified world market sugar figures.
As of May 25 , 2014 total sugar supply is a bit higher than the previous crop year. However, domestic consumption for raw and refined sugar increased by 1.02 percent and 10.66 percent respectively, while both exports of raw sugar to the US quota and world market climbed by 22 percent and 33 percent respectively.
The consumption figures manifested the real sugar demand figures of the domestic market which is the outcome of the joint efforts of the government, (the Bureau of Customs in coordination with SRA) and the Sugar Alliance of the Philippines in curbing sugar smuggling. The tightening of controls at the BOC and strict implementation of customs rules and regulations are major factors leading to the drop in sugar smuggling activities.
The Sugar Board projected domestic consumption of raw and refined sugar by the end of the crop year will reach 2.2 million metric tons and 1.1 million metric tons or an increase of 1 percent and 9 percent respectively, compared with the previous crop year.
With the increase in domestic demand, upward movement of domestic millsite prices was recorded from a low average of P1,411 per 50-kilo bag in January 2014 to a high average of P1,688 in May 2014.
The SRA projected a total world market export of 150,000 metric tons and fully complies with the country’s US quota of 136,000 metric tons, leaving outstanding stocks of around 100,000 metric tons of world market sugar.
When the conversion of world market sugar to domestic market sugar is implemented, it is estimated that total buffer stocks of raw and refined sugar for the domestic market will be around 275,000 metric tons, a bit higher than the standard buffer stock level of 250,000 metric tons every end of the crop year.
Buffer stocks of US quota sugar and world market sugar will also be maintained at around 22,000 metric tons and 10,000 metric tons, respectively, to supply our foreign buyers and US quota commitment during the lean months of sugar production.
90,000 metric tons of world market sugar is considered for the conversion program.
Rosemarie S. Gumera Manager III, Planning & Policy Department
Contact Nos.:+632-9296137;+632-4550446; +63-9175936806;
|Last Updated on Tuesday, 10 June 2014 06:45|