Law Summary

Introduction

This Sugar Order issued by the Sugar Regulatory Administration (SRA) addresses the advance swapping of "A" sugar (U.S. quota sugar) into "B" sugar (domestic sugar) for the crop year 2000-2001. The order aims to stabilize market conditions in light of an anticipated sugar supply shortage.

Purpose and Mandate

• Legal Principle: The SRA is mandated to balance sugar supply and demand to stabilize market prices.
• Context: The anticipated shortfall in sugar production for crop year 2000-2001 is expected to create supply tightness until the new crop year in September/October 2001.
• Market Conditions: The market has significant stocks of "A" sugar available, which necessitates a mechanism for its allocation in the domestic market.

Advance Swapping Provision

• Explanation: Outstanding "A" quedan-permits (both regular and swapped) can voluntarily be exchanged for "B" sugar.

• Key Definitions:

  • "A" Quedan-Permits: Permits for U.S. quota sugar.
  • "B" Sugar: Domestic sugar.

• Requirements:

  • Advance swapping is voluntary and applicable to all eligible "A" quedan-permits.

• Timeframe:

  • Applications for advance swapping must be filed by 31 August 2001.

• Consequences: Failure to comply with the terms of the advance swapping will result in forfeiture of the bond provided.

Financial Obligations

• Advance Swapping Fee:

  • A fee of ₱1.00 per LKg-Bag will be charged for the advance swapping process.

• Bond Requirement:

  • A bond of ₱10.00 per LKg-Bag must be submitted in cash or check, which may be forfeited if the applicant fails to replenish the "A" sugar by 31 March 2001.

• Replenishment:

  • Upon successful replenishment, the bond will be returned to the applicant.

Application Process

• Stamping Requirement:

  • "A" quedans involved in the advance swapping must be stamped with the designated notation.

• Authority Letter:

  • The SRA will issue a Letter Authority to mills for the withdrawal of "A" sugar as "B".

Implementation and Compliance

• Immediate Effect: The order takes effect immediately upon adoption.
• Modification of Prior Orders: Any conflicting provisions in previous Sugar Orders or Circular Letters are revoked or modified.

Key Takeaways

• The SRA Sugar Order No. 6 enables the advance swapping of U.S. quota sugar into domestic sugar amid anticipated supply shortages.
• A financial obligation including an advance swapping fee and a bond is required for participants.
• Applications must be submitted by the specified deadline, with strict conditions for replenishment to avoid penalties.
• The order supersedes any prior inconsistent regulations, affirming the SRA's authority in managing sugar market conditions.