The Philippines will not be able to fill up its sugar export quota to the United States in the 2012/13 season and changes are coming for the sugar industry when a Southeast Asian regional free trade area is implemented from 2015, a report by the U.S. agriculture attaché said.
The attaché report is compiled by agriculture experts of the U.S. embassy and is considered as authoritative by the commodity trade.
Among the changes for the Philippine sugar industry is that it will no longer be protected by a tariff wall when the free trade agreement under ASEAN goes into effect in 2015, the report explained.
Philippine government tariffs on raw and refined sugar imports are supposed to drop to 5 percent in 2015 from 38 percent in 2010.
“This reduction in AFTA (ASEAN Free Trade Area) tariffs is expected to significantly impact Philippine sugar production and trade as other ASEAN producers, particularly Thailand, enjoy lower production costs,” the attaché report concluded.
The very real danger for Philippine sugar producers is they could be displaced and even eliminated by their Thai rivals.
The Agriculture Department is trying to implement programs to consolidate farming operations, but the record so far has been mixed.
On another front, it looks like the sugar quota awarded the Philippines by the United States will go unfilled.
The Philippines has a sugar export quota to the U.S. of 144,901 metric tons, but the attaché report said the quota “will not likely be filled this year due to ample U.S. (sugar) supplies.”
The Philippines is normally the third biggest supplier of sugar under the U.S. import quota program.
The U.S. is a top market for Philippine sugar because prices of sugar in America would normally run around 35 to 45 U.S. cents a pound while prices of sugar in the world market fetch about 18 to 20 cents.
The attaché report said Philippine sugar exports in 2012/13 may hit 250,000 tons and the new export markets would be Japan, South Korea, Singapore, Canada, Samoa, Tonga and Malaysia. – Rappler.com
Note: Rene Pastor is with Philippine Commodities Digest, a weekly publication of New Jersey-based A & V Media that provides a comprehensive roundup of developments and trends in the country’s key farming and mining sectors. He is a freelance journalist who worked with the news agency Reuters for nearly 23 years. He graduated with a Masters degree in International Affairs from the New School in New York city and received a bachelor of arts in Communications from the Ateneo de Manila University. Rene is also a lecturer at Middlesex County College in Edison, New Jersey.
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