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Sugar prices to go down as imports expected to arrive by November

A MAN repacks sugar in packets at a public market in Taguig City, Aug. 27, 2008. — REUTERS/CHERYL RAVELO

By Luisa Maria Jacinta C. Jocson, Reporter

SUGAR PRICES may soon drop as imports of refined sugar are expected to arrive by November. 

This after the Sugar Regulatory Administration (SRA) issued Sugar Order (SO) No. 2 which authorized the import of 150,000 metric tons (MT) of refined sugar for the current crop year “to ensure domestic supply and manage sugar prices.”

“The import volume of 150,000 MT of refined sugar is good for now. This will satisfy the consumers and industrials, and (also) bring down retail prices,” United Sugar Producers Federation President Manuel R. Lamata said in a Viber message.

Federation of Free Farmers National Manager Raul Q. Montemayor said in a Viber message the sugar order is a “safe” decision by the government to “ensure the availability of stocks while waiting for new harvest to come in.”

Retail prices of sugar have surged in recent months amid a supply shortage. As of Sept. 2, the average retail price of refined sugar in wet markets nearly doubled to P97.43 per kilogram from P52.71 in the same period a year ago. The price of raw sugar also rose by 60% year on year to P72.43 now.

Under SO No. 2, the 150,000 MT of refined sugar imports will be equally allocated for industrial users and consumers.

Industrial users are defined as food and beverage manufacturers that use refined sugar in products that are for sale in the local market. Consumers, on the other hand, are defined as wholesalers and traders who sell sugar in bulk to retailers.

Under the order, sugar imports are expected to arrive not later than Nov. 15. Traders are given one month from Nov. 15 to fully distribute the allocations to industrial users and consumers.

Fermin D. Adriano, former Agriculture Undersecretary for Policy, Planning, and Research, said there may be a need for additional imports in order to further bring down prices.

“If they want prices to go down or meet demand of bottling companies, they will have to import more. If not, (we) will just have to spend more to buy sugar. Our sugar prices are three times more than the world market prices,” he said in a Viber message.

Beverage manufacturers, including Coca-Cola Beverages Philippines, Inc., Pepsi-Cola Products Philippines, Inc., and ARC Refreshments Corp. earlier announced that they are facing a shortage of premium refined sugar.

Coca-Cola previously said the local food and beverage industry will require at least 450,000 MT of premium refined sugar for continued production.

However, Mr. Lamata said that the SRA must monitor the crop year’s output in order to determine if another importation order is necessary.

“We will know for sure come April to May next year. When the milling season ends, the SRA should do a private inventory of the whole industry as to how much sugar stocks are left. That’s the time we will know if we need to import or not,” he added.

Meanwhile, Kilusang Magbubukid ng Pilipinas (KMP) Chairman Rafael V. Mariano said that the import plan is ill-timed as it coincides with the start of the milling season.

“There is no need for imports. There is no need for that 150,000 MT of sugar because we have locally produced and locally milled sugar coming in. We have already started milling production,” he said in a phone call interview.

The crop year began on Sept. 1, 2022 and ends on Aug. 31, 2023.

The SRA board also issued SO No. 1, which allocates all sugar output for the crop year as class “B” or for domestic use.

“Planters themselves are saying that there is no shortage or lack of supply. We have enough. If the reason behind the import program is to lower prices, there is no need for that,” Mr. Mariano added.

Farmer-scientist group Magsasaka at Siyentipiko para sa Pag-unlad ng Agrikultura (MASIPAG) said in a statement that the government should focus on boosting local production instead of relying on importation.

“Importation is never the answer, transforming the current sugar production system and strengthening of local production anchored in genuine rural development is… Sugar importation, which is the entry point for fully liberalizing the sugar trade, would result in a 6.8% decrease in domestic output,” MASIPAG said.

MASIPAG pushed for sustainable and organic sugar farming, which can “re-localize the food system and pave the way for a pro-people sugar industry.”

Mr. Montemayor also called for the review of the Sugarcane Industry Development Act (SIDA).

“There are several billion pesos earmarked for the sugar sector under the SIDA, but only a small percentage is being spent.  We need to study whether this is because of inefficiencies within the SRA or defects in the SIDA law itself,” he said.

SO No. 2 is the first sugar import plan issued under the new administration. It comes after the “illegal” release of SO No. 4, which would have allowed the import of 300,000 MT of refined sugar.

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