Soda makers need more imported sugar

MANILA, Philippines — Soda makers are asking for another round of importation of premium refined sugar this year, but industry stakeholders are asking the manufacturers of carbonated soft drinks to bare their requirements and projections first to support their claims of shortage.

The Sugar Regulatory Administration (SRA) has issued its first memorandum circular this year, seeking the comment of industry stakeholders on the request of the carbonated soft drinks industry to President Marcos for another round of sugar importation.

The Confederation of Sugar Producers Association Inc. (Confed) and the National Federation of Sugarcane Planters (NFSP) submitted their comments on the sugar importation proposal.

While it has yet to submit its comment, Panay Federation of Sugarcane Farmers Inc. (PANAYFED) said it agrees and supports the position of NFSP and Confed.

These three federations make up 50 percent of the country’s domestic sugar production.

In its letter, Confed has asked the soft drinks industry to provide their pre-final crop estimate and demand projection calendar year 2022-2023, their specific monthly volume requirements from January to August, and their proposed volume and schedule of arrival of imports.

Additionally, NFSP sought the industry’s latest figures on the current supply and demand situation.

Confed president Aurelio Valderrama and NFSP president Enrique Rojas said the federations recognized that there is a projected shortage in domestic sugar production versus consumption at the onset of the milling season.

“Consistent with our previous position, all sugar imports (if justified) should be calibrated on the basis of verified requirements and the time of need. Thus, only the necessary volume of sugar should be imported at the proper time,” he said.

Confed and NSFP clarified that they are not against importation, since they supported the issuance of Sugar Order 4 for the importation of 300,000 metric tons (MT) of sugar in August last year, which was botched since it was unauthorized by President Marcos.

“However, we are already almost halfway in the current milling season, and we already have the actual sugar production and withdrawals figures from which we can make a more informed assessment of the sugar supply and demand situation,” Rojas said.

The figures requested from the soft drinks industry must justify the requested importation, the groups said.

Further, Confed and NFSP said imports should not arrive during the peak milling season so as not to depress domestic millgate prices.

The federation also urged the SRA to ensure that the premium refined sugar imports sought by soda makers are actually used for their intended requirements and do not leak into the retail market.

In August last year, beverage manufacturers – Coca-Cola Beverages Philippines Inc. (CCBPI), Pepsi-Cola Products Philippines Inc., and ARC Refreshments Corp. – jointly announced that they are experiencing a shortage of premium refined sugar that is used for production of their products.

In particular, the shortage has affected the production capability of CCBPI’s bottling plants.

CCBPI said that the local food and beverage (F&B) industry requires at least 450,000 MT of premium refined sugar to utilize 100 percent of its manufacturing capacity for the rest of the year and to serve the orders of customers.

To meet soda makers’ requirements and address supply gap, the SRA board issued the SO2 for the importation of 150,000 MT of purely refined sugar a month later to stabilize supply and market prices. SO2 was issued in place of the unauthorized SO4.

Under SO2, the soft drinks manufacturers were given an allocation of 75,000 MT imported sugar to help them secure sufficient supply of bottler’s grade sugar.