Biz groups support sugar importation to address supply shortage, rising prices
The Philippine Chamber of Commerce, and Industry (PCCI), Philippine Food Exporters (PHilfoodex), and Philippine Exporters Confederation (Philexport) are calling on the government to immediately look into the crippling supply of sugar that is expected to hurt both the local food processors and manufacturers and the consumers in general.
In a joint statement, the group also urged the Sugar Regulatory Administration (SRA) to allow the importation of sugar as a precautionary measure to address the shortage in the supply and the increasing prices of refined sugar and sweetened food and beverage products. According to SRA, the cost of refined sugar in Metro Manila is approximately P115 per kilo. It is likely to spike up if supply is not immediately addressed.
PCCI President George Barcelon said that they recognize the need to protect the sugar producers and millers, however, they also believe that government should strike a balance and consider expanding import requirement before the situation worsens, which could lead to higher inflation.
Refined sugar is an essential component in food manufacturing. Based on Philfoodex data, the annual production is at 771,000MT with a carry-over stock of 144,000MT. This gives a total refined sugar stocks balance of 915,000MT; however, the country’s demand for annual refined sugar is at 943,000MT. At the same time, the monthly estimated demand is 83,000MT, resulting in a short in demand of 28,000MT.
In December 2021, the government allowed the importation of 200,000 metric tons. This amount was only distributed to and consumed by industrial users, and no imports had reached the domestic food processors and retail market.
Since 2015, Barcelon said that they have requested the SRA to allow domestic food manufacturers and processors to import low-cost sugar to help them level the playing field against imported sugary products coming into the country at cheaper prices. However, this long-standing advocacy has not progressed, and SRA instead issued Sugar Order No. 1, which intends to allocate 100% of sugar production to the domestic market for Crop Year 2021-2022.
“In our March 2022 joint letter to SRA, we requested an allocation of 10,000 bags of 50 kg/bag of refined sugar per month to serve the needs of the local food processors due to this new policy. While we believe that the new sugar allocation may benefit and protect the farmers, it puts the greater majority of consumers and the food manufacturing sector at a disadvantage. This is because the “B” sugar allocation will be based on current domestic prices, which are considerably higher, ranging from Php85.00 to 115.00 per kilo compared with world market prices which only cost from Php32.00 to 35.00 per kilo, thus putting us behind our ASEAN counterparts who enjoy a lower cost of sugar inputs sourced from the world market,” he explained.
With the new order of President Marcos to revive and modernize the agriculture sector, the group hopes that the sugar industry will be given the right technology and farming support to increase its production in order to meet domestic requirements. “And while we have yet to address the productivity issue, importation at this point is the alternative recourse to mitigate the negative impact on the supply,” he added. --- Donna Brazas Angulo and Ma. Joanna Paula L Pascual