Sugar Regulatory Administration chief James Ledesma said the industry has identified ways to prepare for 2010 when the ASEAN Free Trade Area tariff for sugar will go down to only five percent.

Ledesma, in a presentation at a local business and industry forum, said that three years from now, a possible scenario is that the world market price of sugar will fluctuate to between $0.10 and $0.14 per pound and assuming that cost and exchange rates remain at its present levels, that could translate to between P661 and P892 per Lkg.

Considering that the present cost of production is about P742 per Lkg, such price levels will no longer be manageable by 2010. Ledesma said that at the Sugar Master Plan workshop, sugar industry players have concluded that they have to bring down the unit cost of production by improving productivity and efficiency in the farms and in the mills.

The preliminary targets include 75 tons per hectare, 2.2 LKg per ton cane and 86 percent overall recovery in the mills.

Ledesma added that the industry is also exploring the possibility of actively participating in the ethanol program of the government.

Given the fact that we have already the sugarcane farms and the mills, we can move faster than investors, he said.

The mills are also exploring the possibility of increasing revenues by going into power co-generation, Ledesma added.

Under the AFTA, the Philippines was able to move sugar to its sensitive list, which requires gradually lowering tariffs from 2003 to a rate of not more than five percent by 2010.

AFTA is composed of 10 members of the Association of Southeast Asia Nations, including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.*NLG

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