THE Philippines is mulling over importing 350,000 metric tons (MT) of sugar to plug the shortfall in domestic supply and arrest skyrocketing prices of the sweetener.
A draft Sugar Regulatory Administration (SRA) Sugar Order (SO) obtained by the BusinessMirror showed that the agency plans to open an importation program of 250,000 MT refined sugar and 100,000 MT raw sugar.
The 350,000-MT sugar import proposal was based on concerns that the country will have tight supply toward the end of the current crop year 2021-2022—which in turn could worsen the unabated increase in prices of the sweetener that have already reached new record-highs.
The draft SO also cited the manifestation made by industrial sugar users during a March 1 House Committee on Agriculture and Food hearing, that their sugar stocks would already be depleted by May 27.
Based on the SRA’s projections, the country would have a raw sugar balance of a measly 27,337.97 MT and refined sugar stocks of only 36,576.05 MT by August 31, the end of the current crop year. The country ‘s average ending raw and refined sugar balance in the past decade is at least 150,000 MT, respectively.
The projected lower ending stock balance is caused by a reduced estimated raw sugar output in the current crop year which is only at 1.982 MMT, the lowest in more than a decade. Total raw sugar supply for crop year 2021-2022 is estimated at 2.212 MMT while total demand is pegged at 2.185 MMT. (Related story: https://businessmirror.com.ph/2022/03/10/phl-may-see-lowest-sugar-output-in-a-decade/)
Based on the draft document, the SRA reported that sugar milling has been “slowly winding down,” with some mills having problems sourcing sugarcane while some plantations have already finished harvesting for the season.
“There is a lull/gap in the production of sugar between the end of the milling/refining season and the start of the next season wherein a comfortable volume of stock balance is needed to cover demand until production for the next season,” read the draft document, which is now being deliberated by the SRA board.
Latest SRA data showed the average wholesale price of 50-kilogram bag raw sugar as of April 1 is now at P2,266.15 while wholesale price of refined sugar has reached an unprecedented P3,084.23 per 50-kilogram bag. SRA data also showed that the average retail price of raw sugar is now at P51.43 per kilogram while refined sugar is at P68.14 per kilogram.
Import provisions
The SRA consulted industry stakeholders, including both sugar planters and millers, last March 8 about the country’s current and projected sugar supply situation.
Under the draft SO, the 100,000 MT raw sugar import allocation could be sold directly for consumption or for tolling to refined sugar. Eligible participants for the raw sugar import program include industrial consumers and registered traders.
The draft SO said 100,000 MT of the 250,000 MT proposed refined sugar importation shall be standard grade refined sugar while the remaining 150,000 MT refined sugar shall be premium grade or bottlers’ grade refined sugar.
The eligible participants for the proposed refined sugar import program are industrial users—confectionaries, biscuits, bread, candies, milk, juice, and food and beverage manufacturers, and registered traders.
“All raw sugar and refined sugar imported under this order must arrive in the Philippines no later than August 31,” the draft document read.
Under the draft, half of the raw sugar import allocation must arrive no sooner than May 15 with the remaining half arriving no sooner than July 1 and no later than August 31.
For the imported refined sugar, 50 percent of the importers’ approved allocation shall arrive no sooner than April 29 with the remaining half arriving no sooner than June and no later than August 31.
Stakeholder reactions
Sen. Imee R. Marcos slammed the proposed 350,000-MT sugar importation and urged Agriculture Secretary William D. Dar not to sign the SO formalizing the importation.
Marcos said in a Facebook post: “We are calling on Agriculture Secretary William Dar not to sign the latest sugar import proposal of 350,000 metric tons which was approved by SRA chief Hermenegildo Serafica.”
United Sugar Producers Federation (Unifed) Manuel Lamata said the sugar planters are aware of the proposed 350,000-MT import program.
Lamata said Unifed is preparing legal options, including another temporary restraining order should the SRA board clear the import program.
“If this will be signed by Sec. Dar, our sugar federation is consulting with our lawyers on bringing the Secretary and SRA chief Serafica to court. If our lawyers say [file a case in the Ombudsman], then so be it,” he told the BusinessMirror.
The BusinessMirror sought SRA Administrator Hermenegildo R. Serafica’s comments, but he has not responded as of press time.
In an interview, SRA board member Roland Beltran said the SO is still being deliberated by the board. However, Beltran, who represents the milling sector, said he has already manifested his concerns with the proposed import program.