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| Philippines may extend sugar imports to fill export quotas |
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The Philippines, planning its first sugar imports in eight years, may need to keep buying through the 2010-2011 crop year as an El Nino-induced drought may damage crops and to help fill export quotas to the U.S.
Production in the crop year starting in September may total 2.3 million tons compared with 2.18 million tons in the current season, said Rafael Coscolluela, administrator of the Sugar Regulatory Administration, in an interview in Manila yesterday. The Philippines plans to import as much as 150,000 tons in the first half to cool local prices, adding to nations including India, Pakistan, China and Russia seeking to buy the commodity. The planned import would be the first purchase for the Southeast Asian nation since 2002. Sugar prices doubled last year and are up another 12 percent this year because of weather disruptions to crops in Brazil and India, the world’s biggest producers. “The new crop looks good because of favorable prices. If there’s no extended El Nino, we would likely produce 2.3 million tons,” Coscolluela said. A dry spell that may last up to four months will not hurt sugar cane, but “we may have to do something if its last for six months or more,” he said. The El Nino weather phenomenon will likely influence the Philippines’ climate through the first half of 2010, with 20 provinces already experiencing below-normal rainfall, according to the country’s weather bureau. Calls for cloud seeding have been mounting in Negros, a province in central Philippines that produces 60 percent of the country’s sugar, Coscolluela said. U.S. Quota Demand may rise to 2.437 million tons in the next season, including 137,000 tons in annual export quota to the U.S, which may rise on forecast global supplies will fall short of demand, Coscolluela said. The Philippines also keeps a two-month buffer stock of 360,000 tons on top of an expected 2.3 million tons in forecast domestic demand. Meantime, the Philippines may see an increase in its export quota to the U.S., given tight global supply. “Traditionally, the Philippines has always tried to honor its commitment to the U.S. because it’s a generally favored market,” Coscolluela said. “You wouldn’t want to miss on your quota just because of a temporary situation because the U.S. may decide to give that to other countries.” Raw-sugar futures rose to 30.40 cents a pound in after- hours trading on ICE Futures U.S. Source: Bloomberg |
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