The lowering of proposed import fees on sugar alternatives could trigger an influx of more sugar substitutes in the country, causing millgate sugar prices to further drop, the Sugar Council and National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP) said in a joint statement on Sunday, Dec. 22.
Administrator Pablo Luis Azcona of the Sugar Regulatory Administration (SRA), in response, said the two groups are misinformed again.
The Sugar Council and NACUSIP, in a press release, said they were reacting to reports that the SRA is planning to reduce the proposed P10 per 50-kilo bag raw sugar equivalent of alternative sweeteners under Tariff Line 1702, such as glucose, fructose, artificial honey, palm sugar, maltose and others.
In a news report Agriculture Secretary Francisco P. Tiu Laurel Jr. was quoted as saying that competition from imported artificial sweeteners could have caused the drop in millgate sugar prices,” the two groups pointed out in their joint press statement.
Through their letter dated September 16, the Sugar Council and NACUSIP brought the issue of artificial sweeteners to Laurel, concurrent chair of the Sugar Board. In that letter, the two groups requested the Secretary’s help in providing data on the impact of artificial sweeteners on the consumption of locally produced sugar.
Apparently in response to the request, the SRA prepared the draft of a sugar order imposing the P10 import clearance fee. Soft drinks and beverage manufacturers reportedly objected to the initial P10 amount, claiming that it would be inflationary. The SRA accommodated the objection, and “decided to lower the prospective import clearance fee by a ‘considerable’ amount”, they said.
“The SRA’s proposed sugar order to monitor the volume of these imports is a move in the right direction. However, lowering the proposed P10 import clearance fee might increase the importation of these sugar substitutes and cause millgate sugar prices to drop further,” the Sugar Council and NACUSIP added.
Except for a slight increase last week, millgate sugar prices have plummeted from a weekly average high of P2,827.85 per 50-kilo bag in Week Ending October 20 to P2,498.55 in Week Ending December 1, according to the latest SRA Weekly Millsite Prices of Raw Sugar and Molasses Report. At one mill two weeks ago, millgate sugar price plunged as low as P2,450 per bag, which is barely above production cost, they said.
Among the factors being blamed for the drop in prices are the untimely arrival at the milling season’s start of the 240,000 metric tons imported refined sugar under Sugar Order No. 5 for Crop Year 2023-2024 and the importation of artificial sweeteners. Imported refined sugar and imported sugar substitutes displace the demand for locally produced raw and refined sugar, the two groups said.
Aside from high fructose corn syrup, the three most popular artificial sweeteners used in beverage manufacturing are Sucralose, Aspartame and Acesulfame Potassium. Scientific data disclose that Sucralose is 600 times sweeter than sugar, while Aspartame and Acesulfame Potassium are 200 times sweeter than sugar, they added.
Records at the Philippine Statistics Office reveal that the combined importation of these three artificial sweeteners has risen from 950,989 kgs in 2022 to 1,100,783 kgs in 2023. The importation of Sucralose registered at 267,567 kgs in 2022 to 433,775 kgs in 2023, Aspartame at 416,662 kgs to 631,767 kgs, while Acesulfame Potassium decreased from 266,760 kgs to 2,241 kg, they said.
The Sugar Council and NACUSIP pointed out that stiffer measures should be imposed to discourage the entry of all kinds of sugar substitutes and artificial sweeteners in the country to safeguard the livelihood of thousands of sugarcane farmers and their families.
“Instead of discouraging the entry of these imported products which displace locally produced sugar, why is SRA proposing a lower import clearance fee for these imported sweeteners?” the Sugar Council and NACUSIP asked.
Azcona, in response, said Sugar Council is once again mis-informed.
At the present, imports under HS1702 which does not include artificial sweeteners like sucralose and aspertame, and the others they mentioned, are imported into the country without any import fees, nor are they required to secure any import clearance from SRA, he said.
HFCS is the only item on HS1702 that has been required an import clearance, and the fees for HFCS has been raised by this SRA and DA from 1.50/bag previously to 30/bag, Azcona said.
Other items on HS1702 like glucose, fructose, dextrose, and the like, were never required an import clearance and were never charged any import clearance fee, he added.
The previous administrations simply ignored and allowed these importations under HS1702, and these SRA administrations came from the Sugar Council’s group, he said.
The artificial sweeteners mentioned by Sugar Council are not under HS1702, but under HS2106.90.71, which is not covered by the SRA Sugar Order, Azcona added.
The previous SRA administrations also ignored the importation of artificial sweeteners under 2106.90.71 and never charged them a fee or required them a clearance, he said.
“Now that finally someone is doing something about other sugars to protect our farmers, they will make noise. Why didn’t they do anything in their time? Who were they protecting?” Azcona asked.
It is the first time that any fee will be charged for HS1702 items or simply called “other sugars”, and this will also be the first time that such items will be required an SRA import clearance, he said.
In our meeting, the initial proposal for the fee was 10/bag, however, when the DA presented this, other agencies explained concern that since this will be the first time that a fee will be charged, it might be inflationary. So a counter proposal for a lower fee was agreed upon, Azcona saod.
Once again, the things mentioned by Sugar Council are not part of HS1702 as they are artificial sweeteners, and not “other sugars”, he said.
Once again, this fee and requirement for a SRA import clearance has never been done before, and only under the administration of Pbbm, DA Sec Tiu Laurel, and the current SRA Board, has the farmers further received additional protection by requiring such, Azcona said.
“We clearly feel that these people need to be properly informed before going to media.
Let me repeat, there are currently no measures against any of these, and its the first time fees and clearances will be imposed,” Azcona said.*