Trade Secretary Ramon M. Lopez is in favor of changing rules on importing sugar and said manufacturers should be allowed to directly buy the staple from foreign producers.
In a recent speech, Lopez said sugar-based manufacturers will always be on the losing end if the government will not allow them to directly import sugar. Consumers, he argued, will bear the burden of higher prices as producers will be forced to use domestic sugar, which is currently more expensive than imports.
“All those manufacturing sugar users in the sector are at a disadvantage right now. What’s the solution? The solution is to allow importation. The good thing is that the DA [Department of Agriculture] has actually allowed already the importation of sugar,” Lopez said.
“The bad news, of course, is it has been limited to a sector of planters, the millers and the traders. Why should it be limited to this sector?” he added.
Lopez questioned the importation rules, and pointed out: “Why don’t we allow the sugar-using industry to import their requirements so they benefit from the lower cost input, so the industry will be more competitive? That’s an issue.”
The chief of the Department of Trade and Industry believes the sugar importation regime must be liberalized and manufacturers must be permitted to buy foreign sugar if
“At the end of the day, if you add all these costs—additional fees on any sugar importation—when it gets to retail, to the supermarkets and the wet markets, the sugar becomes too expensive already. You get sugar for what used to be P50 per kilogram [kg], [now] it is close to P60 and, even more, P65 per kg,” Lopez added.
“That’s also the reason some basic commodities are priced high, as sugar prices have been really going up. It’s not good for consumer, [nor is it] good for the manufacturing
industry,” he said.
In a previous interview with the BusinessMirror, a confectionery industry source demanded that the government allow manufacturers to directly buy imported sugar. The source said “there has to be a built-in mechanism that if there is a shortage, even industrial [users will be allowed to import].”
Agriculture Secretary Emmanuel F. Piñol warned traders that he will permit direct importation of sugar if they fail to supply the volume required by manufacturers.
The source said, however, that Piñol’s plan is not enough and it is already “moot” to discuss the importation of 200,00 metric tons (MT) of sugar at this point.
“It is a moot point [to discuss that] at this time. They will let their recent sugar order to import play out, whatever happens. What we are looking forward to is the future,” the source said.
“It will hasten the importation because manufacturers will be accredited to do so. [They should also] do away with the conversion, or let the government mandate the conversion rates,” he added.
The industry insider argued the government will still oversee the procedure if manufacturers are given the freedom to import the staple in times of shortage.