Sugar producers support call to halt export of sugar to US

by Madelaine B. Miraflor, Manila Bulletin, 5 Oct 2019

Confederation of Sugar Producers (CONFED), the largest sugar group in the country, is supportive of the call to halt the country’s sugar exports to the United States (US), which could mean letting go of the world’s largest economy as a regular, consistent trading partner when it comes to this particular commodity.

CONFED Spokesman Raymond Montinola said his group agrees with Senator Juan Miguel Zubiri that the allocation for “A” sugar or US Quota Sugar should have been kept as “B” sugar or that for domestic use since the country is falling short in sugar production.

“This allocation could have provided better prices for our local farmers who are in a quandary as to the marginal farm-gate prices of sugar in the past 3 years,” Montinola said.

In the sugar order (SO) number 1, Sugar Regulatory Administration (SRA) pegged the production target for this crop year at 2.096 million metric tons (MT), 5 percent or 105,000 MT of this has been allotted to meet the country’s obligation to US.

In a Senate resolution, Zubiri urged the Department of Agriculture (DA) and SRA to convert the A sugar to B sugar, saying that the country’s production target is way lower than the consumption, which is estimated to be at 2.4 million.

“If we avail of the US TRQ [tariff-rate quota] this will leave us with 1.99 million MT available for domestic consumption and short of more than 400,000 MT, which the country has to import to fill the domestic consumption,” Zubiri said.

He also pointed out that with the current domestic price of sugar at P1,500 per 50-kilo bag and exports to US priced only at P1,100 per 50-kilo bag, this in effect will result to the domestic consumers subsidizing the price of sugar export to the US.

SRA Board Member Beltran earlier said that there’s always a need for the Philippines to set aside portion of the country’s sugar production to the US despite the tight supply because the country can’t afford to lose it as a market.

Zubiri, however, pointed out that if ever, this will not be the first time that the Philippines will not avail of the US TRQ due to lower domestic production of sugar.

“There were instances wherein we did not export or at least reduced our sugar export to the US upon proper representation with the US Department of Agriculture and Trade Representative,” Zubiri said.

Meanwhile, Montinola said his group doesn’t have a problem about beverage companies being the only ones who have direct access to sugar imports as they have preferred standard for their softdrink manufacture.

“But it must be emphasized that this should be under the direct supervision of the SRA for a calibrated, timely and transparent import program,” Montinola said.

He also pointed out that at the moment, local sugar producers can’t compete with world prices since it is primarily a dumped market, or only the excess of sugar produced by other countries.

“Most sugar producing countries have quantitative restrictions in place likewise to protect their local market – case in point Indonesia and Malaysia who produce less than their demand, yet they keep a keen schedule of sugar imports to allow their sugar producers earn a profitable livelihood,” Montinola said.

“Our local sugar industry right now need the support of government. And among which is to ensure we have stable prices for our sugar. The SIDA [Sugar Industry Development Act] law will definitely make the sugar industry efficient but it is still at an infantile stage. Given enough time and continued government support (same as what the other progressive countries is doing) our sugar industry will become competitive,” he added.

In the recently ended sugar crop year, which spans from September to August, the country’s total sugar output was only 2.072 million MT. This is lower than what the sector has produced in the previous years.