Confectionery producers seek government OK to import sugar

MANILA, Philippines — Local manufacturers of confectionery products are seeking the government’s approval to import sugar due to the prevailing high cost of domestic sugar.

In a letter sent to the Department of Trade and Industry (DTI), the Philippine Confectionery Biscuits and Snack Association (PCBSA), a group of 18 producers of confectionery items, lamented the cost of domestic sugar which now costs 200 percent more than the sugar produced outside the Philippines.

“Price distortion is very significant to PCBSA members as sugar is the main ingredient of a confectionery item. On average, sugar constitutes about 60 percent of each confectionery item,” PCBSA president Kissinger Sy said.

According to Sy, the price of domestic sugar has recently skyrocketed to as high as P2,790 per 50-kilogram bag as against the landed price of imported sugar at about P1,300 per 50-kilogram bag.

He said that even at this price, availability of supply is still not assured.

With “the survival of local confectionery producers now at stake,” Sy said PCBSA members are worried with the present situation because the market share of importers of confectionery products had significantly increased from a mere five percent in 2010 to 30 percent in 2017. 

For last year, the group estimated the sales of confectionery items in the country, excluding chocolates, reached P30 billion.

To make local confectionery items competitive, Sy said the government should in the interim allow PCBSA members to import sugar, with the long term solution of allowing everyone to bring in sugar to assure stable supply, enhance free competition, and ensure a level playing field.     

Sy said with the government recently allowing all traders to import rice following the order from President Duterte, such policy should also be applied with respect to sugar since the commodity is essentially an ingredient for various end-products.

To address the fears of local sugar millers with its proposal, Sy said the importation by PCBSA members may be allowed only under certain conditions, such as the importation should meet only their manufacturing requirements, members will not be allowed to sell or trade imported sugar to the domestic market, and the importation should be only on a one-time basis for a calendar year.

PCBSA said despite the recent moves and assurances of the Sugar Regulatory Administration to address the issue of adequate supply of sugar in the domestic market, the price of sugar is not expected to substantially go down and will still be prohibitive.  

“PCBSA is not seeking the same magnitude of support that the government is giving to the sugar industry. But given the local confectionery industry’s contribution to the economy, this industry likewise deserves support from the government,” Sy said.

The group has requested a dialogue with Trade Secretary Ramon Lopez to discuss the problem at the soonest possible time.