RP sugar glut seen easing with import ban

RP sugar glut seen easing with import ban

MANILA (Reuter): The Philippine sugar sector, now soaking from a glut due to over importation at cheaper prices, got a reprieve yesterday after the government extended an import ban up to July this year.

"We have extended the sugar import ban to July, at which time we expect the glut to have eased," Sugar Regulatory Administration (SRA) chief Wilson Gamboa told reporters at a news conference.

In October last year, Gamboa asked traders and millers to stop sugar imports up to March this year.

The order was issued to ensure that the large stocks of sugar in the country's warehouses were exhausted.

Gamboa said he expected the sugar glut to be mopped up by June or July this year with the import ban and after the U.S. government increased the country's sugar quota by 27,411 tons for crop year 1996-1997 (Sept-Aug).

The U.S. government pegged the Philippines' sugar quota at 219,000 tons at the start of the current crop year.

The Philippines is a beneficiary of a yearly U.S. sugar import program from developing countries at premium prices.

On Tuesday, the U.S. government announced an increase by 200,000 tons of its sugar imports in the current crop year. It had earlier set total sugar importation at 1.7 million tons.

Philippine sugar millers and planters welcomed the twin developments.

Philippine sugar millers and planters have asked the government to suspend the tariff discount on sugar given to Association of South East Asian Nation (ASEAN) countries, which is expected to drop from the present 65 percent to 52.5 percent.

The tariff on Philippine sugar from non-ASEAN countries is also scheduled to drop from 100 percent to 80 percent by July 1 as part of the country's commitment to the World Trade Organization.

Early this year, Agriculture Secretary Salvador Escudero had asked the Tariff Commission to raise the tariff on imported sugar to 133 percent from 100 percent from Jan. 1 to June 30, 1997, and to 100 percent from 80 percent from July 1 to Aug. 31.

The Philippine Tariff Commission has yet to act on Escudero's request.

The domestic sugar glut was due to the importation of 1.023 million tons of sugar from neighboring countries in crop year 1995-1996 (Sept-Aug) against production shortfalls of 500,000 tons, Gamboa said.