DA mulls direct sugar imports by bottlers, processors

MANILA, Philippines — The Department of Agriculture (DA) may consider allowing bottlers and processors to directly import sugar if traders continue to fail to deliver the committed volume.

Agriculture Secretary Emmanuel Piñol said beverage giant Coca-Cola FEMSA Philippines was considering directly importing its sugar requirements.

Under the current system of sugar importation, the Sugar Regulatory Administration (SRA) gives an allocation to farmers and planters associations who, in turn, will sell the rights to traders.

The traders, then, will import on behalf of bottlers and processors.

“I warn the traders who won classification rights (COR) to make sure that the intended volume to bottlers and processors be delivered because if they don’t, the government reserves the right and has the power to allow these bottlers to import directly,” Piñol said.

“Once we do that, traders will lose their profits. They better make sure that what they are importing in the name of the bottlers and the processors will actually go to them,” he added.

Last month, the SRA opened the importation for the 200,000 metric tons of sugar, 100,000 MT of which has been allocated for bottlers and processors’ grade refined sugar.

“If traders do not deliver the volume as committed, then we will have to protect the interest of these companies by considering the option of allowing them to directly import. Traders should not play this game on us where they import and hold on to stocks so as to increase prices more,” Piñol said.

Piñol plans to sit down with stakeholders and review and reform the COR system.

“Giving the allocation to planters and farmers associations and then selling to traders and processors would already mean a mark-up on the price of imported sugar which in a way defeats the purpose of why we should import sugar,” he said.

While sugar prices are actually down in the global market, Piñol is not keen on taking advantage of the situation by importing more.

“Our sugar industry is very sensitive. Doing so would work against the interest of the sugar farmers,” he said.

The SRA resorted to importation following the drop in production.

It expects to produce 2.1 million MT, short of the original target of  2.35 million MT.