• The Philippines hasn’t exported very much sugar this year.
  • This is because domestic prices are high.
  • It’s normally a reliable exporter of raw sugar to the USA.

Poor Sugar Production…Again

  • The Philippines should produce 2.1m tonnes of sugar this season, down 45k tonnes year-on-year.
  • The country’s cane crop suffered a prolonged period of wet weather, meaning cane development suffered.
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  • With consumption at around 2.4m tonnes, it’ll be unable to satisfy domestic demand for the seventh season running.
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The Philippines Takes Action

  • It’s not unusual for the Philippines to be in deficit, but this year, the Government’s acting.
  • It’s decided to not ship its full US Tariff Rate Quota volume so that domestic stocks remain at a sufficient level.
  • We reckon out of the allocated 142k tonnes, the Philippines may fulfil 100k tonnes.
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  • Its exports to the US have been scrutinised since 2014/15 as it has consistently failed to satisfy domestic demand.
  • Action is being taken this season, however, as it’s no longer attractive for the Philippines to export like it has been previously.
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  • With the firm domestic prices, the producers would rather sell 100% of their crop to the domestic market.
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Will the Philippines’ Exports to the US Stop Completely?

  • In previous years, traders and producers have received duty-free import licenses if they exported to the US.
  • This allowed them to cheaply replace any exported sugar and offset the incurred losses.
  • We think this dynamic will remain the same in 2021, but we’re yet to hear whether the SRA will release import licenses.
  • If it does, we could see the Philippines import some sugar in the second half of the year.
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Explainers You Might Be Interested In…

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