SRA defends sugar imports

MANILA, Philippines — The Sugar Regulatory Administration (SRA) defended its decision to allow the importation of 200,000 metric tons (MT) of sugar due to a projected tightness in stock at the end of the milling season.

In a statement yesterday, SRA administrator Hermenegildo Serafica said the board issued an order allowing the importation of 100,000 MT of standard grade refined sugar and 100,000 MT of bottlers’ grade refined sugar after considering the shortfall on the ending balance of refined sugar.

Serafica said that after assessing the damage caused by Typhoon Odette to sugarcane crops, sugar stocks at warehouses, as well as facilities and equipment of sugar mills and refineries in key sugar milling districts, the SRA recalibrated its pre-final crop estimate of raw sugar production to 2.072 million MT, lower than the earlier projection of 2.099 million MT.

Data from the Department of Agriculture-Disaster Risk Reduction and Management Operations Center showed that sugarcane damage due to Typhoon Odette reached P1.15 billion or 8.6 percent of the total agricultural damage.

Serafica said the Philippine Association of Sugar Refineries also revised its refined sugar production forecast for the current crop year to 16.748 million 50-kilo bags (LKg), down from the initial production estimate of 17.572 million LKg

“According to SRA’s projections on sugar supply and demand, this will give the country a very tight sugar stock balance at the end of milling, which will not be enough to cover the two to three months demand for refined sugar in between the milling seasons,”Serafica said.

The crop year starts Sept. 1 and ends Aug. 31 of the following year.

The SRA emphasized that sugar mills and refineries generally stop operations around May to June, and start operations for the next season around September to October.

In contrast, refineries start operations around two weeks after the mills.

“As the economy is once again starting to open up, the demand for raw sugar and refined sugar for January this year have also increased when compared to the same month in the three previous years,”Serafica said.

“Hence the need to augment sugar stocks to ensure food security and availability of sugar to cover sugar demand until the next crop year or milling season begins again,”he said.

Serafica  said the 200,00 MT of refined sugar imports would cover the supply shortfall and would  leave the country with enough buffer stock to tide over until the start of the next milling season.

The implementation of the sugar import program is in line with the directive of the Department of Agriculture (DA) to temper rising sugar prices in the local market, which it attributed to the impact of Typhoon Odette.

Data from SRA’s monitoring unit showed that the wholesale price of raw sugar and refined sugar in the National Capital Region (NCR) reached historic highs of P2,000 and P2,900 per 50 kilo bag, respectively as of Jan. 23.

Similarly, prevailing retail prices of raw sugar in certain public or wet markets registered at P48 a kilo while retail prices of refined sugar stood at P57 to P60 a kilo, higher than the suggested retail prices for the commodities.

Based on the Sugar Order issued on Feb.2, the sugar importation program is open to industrial users of refined sugar.

Industrial users refer to confectionaries, biscuits, bread, candles, milk, juice and food and beverage manufacturers using refined sugar in the production of their finished products in the country that are sold in the domestic market.

The SRA said an industrial user using standard refined sugar may import a maximum of 5,000 MT, while those using bottlers’ grade refined sugar may import up to 10,000 MT .

Sugar stakeholders earlier slammed the approval of the importation volume, saying it was ill-timed and would only benefit industrial users.

“This is appalling that the very agency that is supposed to protect us seems determined to kill the industry,” United Sugar Producers Federation (UNIFED) president Manuel Lamata said in a statement.

For his part, former SRA board member Dino Yulo said the issuance of the order is very ill-timed as sugar milling is at its peak.

“The one that will clearly benefit from this importation are industrial users, especially bottling companies that have been provided half of the import quota,”Yulo said.

He expressed hope that the SRA would reconsider its decision to approve the imports.

“We are still in the midst of a crisis, and our sugar planters in Southern Negros are still trying to recover from the effects of Odette, and here is another crisis that will hit us,”Yulo said.

“We hope that SRA will reconsider and amend the order until they get a good picture from the ground as to what quantity is just needed to ensure that the industry is protected,” he said.