Producers call for sugar summit

Sugar producers are calling for a sugar summit to address declining millgate prices of raw sugar.

National Federation of Sugarcane Planters Inc. (NFSP) president Enrique D. Rojas, in a letter to Sugar Regulatory Administration (SRA) Administrator Nicolas A. Alonso, said sugar planters "strongly feel there is a need for a concerted action among the major players in the sugar industry," as sugar prices are going south.

Alonso earlier admitted that millgate prices of sugar, particularly in Negros Occidental which accounts for 50 percent of local sugar production, are on a skid, especially with reports the National Food Authority (NFA) is planning to import sugar again next year at low tariffs.

Millgate prices in the province were pared down to about P750 per 50-kilogram bag last week from P770 as buyers/traders are holding back purchase orders in anticipation of getting lower prices.

Sugar planters as a result, are increasingly getting nervous as sugar importation will boost local supply and in the process, soften prices.

Rojas said NFSP is recommending a sugar summit to immediately discuss this concern so that proper remedial measures could be implemented to protect sugar producers, particularly the marginal planters.

The NFSP urged the SRA to spearhead the summit and convince government agencies such as the NFA, Department of Trade and Industry, Presidential Anti Organized Crime Task Force, Land Bank of the Philippines, sugar traders and other concerned sectors to participate and submit their recommendations.

Aside from importing sugar at low tariff or through the minimum access volume (MAV), additional importation with a higher tariff may be required to keep up with local demand.

The MAV, which varies per product, is the least volume of imports the government allows for sensitive agricultural commodities.

"Sugar importation is necessary because our local production, even if it reaches the targeted production of 1.7 million metric tons, won’t be enough to sustain domestic requirement," Alonso said earlier.

The country’s annual sugar consumption is 1.9 million MT and the estimated monthly consumption is 160,000 MT.

The sugar MAV for 2001 is 54,087 MT with a low tariff of 50 percent. Outside of the MAV, imported sugar is levied a tariff of 65 percent.

Aside from the inadequate domestic production, the government still has to set aside some 150,000 MT for its exports to the US.

NFA is authorized by Congress to import sugar under the MAV since this helps the former to offset its losses from buying domestic sugar at a support price and selling this to consumers at low prices.

Congress last year directed the NFA to import 51,000 MT of sugar under the MAV to stave off a shortage and prevent domestic prices of sugar from skyrocketing.