US-Mexico trade troubles could raise PHL sugar quota

“We have to watch how US and Mexico relations will be. Mexico wants to export more but I think US is non-committal. So if US doesn’t allocate any quota to Mexico then other sugar-producing countries like the Philippines may be considered for additional allocations,” Sugar Regulatory Administration (SRA) Administrator Anna Rosario V. Paner said in a text message to BusinessWorld on Tuesday.

US President Donald J. Trump, inaugurated last week, has called the North American Free Trade Agreement “the worst US trade deal ever made” because it encouraged the transfer of US manufacturing jobs to Mexico.

On the other hand, Ms. Paner also said that the SRA board recently approved reducing its allocation for exports to the US under the tariff-rate quota scheme.

According to Sugar Order No. 1-A — revising Sugar Order No.1 released in September — sent by the SRA to BusinessWorld on Monday, the agency’s board has approved reducing its allocation to the US to 6% of the country’s total sugar production this year from 8%.

The agency earlier allotted 92% for domestic use, while the remaining 8% was allocated for the US market in anticipation of additional demand.

In addition, the order added that “domestic sugar market remains the priority market for locally produced sugar, and to maintain a comfortable buffer or carry-over volume of ‘B’ sugar during the end of season and for the start of the crop year for stable supply and prices.”

To date, the Philippines has exported 225 metric tons (MT) to the US under the preferential scheme. Ms. Paner assured that there are more exports in the pipeline.

She added that the agency has not deemed it necessary to revise down production projections for the current crop year.

Sugar production for crop year 2016-2017 is expected to hit 2.25 million MT up from 2.24 million MT a year earlier.

A sugar crop year in the Philippines runs from September to August.

Business World Online

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