Liberalization of sugar importation worries local industry

By: Karl R. Ocampo, Philippine Daily Inquirer, Jan 21, 2019

Stakeholders of the sugar industry are not that optimistic with the government’s decision to liberalize sugar imports in the country as a means to address the spike in the commodity’s retail prices.

In a statement, members of the Sugar Regulatory Administration (SRA) board said the move “will spell the demise of the sugar industry,” adding that the increase in the prices of sugar in the market should be blamed on “greedy” traders and retailers.

“Open direct importation is not the solution. Let’s go after the greedy traders and retailers who are capitalizing on the situation at the expense of the sugar farmers and producers,” SRA board planters representative Emilio Yulo said.

“It is not the farm-gate or mill-site prices of sugar that has remained high, it is the retail prices,” SRA board millers representative Roland Beltran said. “Therefore, the high retail prices of refined sugar is not attributable to sugar farmers and millers.”

Based on SRA’s price monitoring reports, the price of domestic raw sugar has gone down to P1,575 per 50-kilogram (LKg) in the first week of January from P1,693 per LKg in September last year.

But after the announcement of Budget Secretary Benjamin Diokno that the administration was looking to deregulate the flow of agricultural commodities in the country especially sugar, prices further went down to P1,470 per LKg in some areas, Yulo said.

“The immediate effect of the news was a further drop in mill-site sugar prices at a time when we are entering the peak of milling. This heightened the restlessness of sugar producers over the future of their industry, livelihood of their families, and continued employment of sugar workers,” the joint statement added.

Despite the decline, the price of sugar in the market increased to P64 a kilo from P60 a kilo. Considering the additional costs that retailers have to pay for the processing and packaging of the commodity, prices should not go beyond P55 a kilo.

“There are two sectors being adversely affected by high sugar prices—the farmers and the consumers,” Yulo said.

Diokno pointed out that sugar in the Philippines was higher than the global rate. Hence, the need to relax the import restrictions on the sector.

Philippine Food Processors and Exporters Organization, Inc., a group of food processors and exporters, has also urged the SRA to allow them to import more sugar for their operations.

SRA chief Hermenegildo Serafica earlier said “the mill-gate price [of sugar] has been declining,” but prices in the market had yet to drop.

“But that is beyond our power. That is already the DTI (Department of Trade and Industry),” he said.

Last year, the SRA allowed the entry of 486,000 metric tons (MT) of imported sugar to address low supply and tame sugar prices—the highest on record since 2010.

For the current crop year beginning in September, sugar production is projected to reach 2.25 million MT, down 5.4 percent from last crop year’s production at 2.38 million MT.