2 sugar planters’ groups fear further drop in millgate prices

The Sugar Regulatory Administration’s latest sugar importation order could lead to a further drop in sugar prices, leaders of two planters’ groups warned anew on Thursday, February 16.

“We believe that the 440,000 mt volume is more than what is needed in the domestic market. This oversupply, coupled with the ill-timed arrival, of imported sugar will surely lead to a further downward slide of millgate sugar prices,” said Enrique D. Rojas, National Federation of Sugarcane Planters (NFSP) president, and Danilo A. Abelita, Panay Federation of Sugarcane Farmers (PANAYFED) president, in a press statement.

The SRA on Wednesday released Sugar Order No. 6 Series of 2022-2023 dated February 6, titled “2nd sugar import program for crop year 2022-2023”.

The sugar order establishes the sugar import program which allows the importation of 440,000 mt of refined sugar, broken down based on its schedule of arrival as follows: 100,000 mt to arrive as soon as possible, 100,000 mt to arrive before April 1, and 240,000 mt to arrive not earlier than April 1.

In their letter sent Thursday to SRA Administrator David John Thaddeus P. Alba, Rojas and Abelita stated that, when SRA asked last month for their recommendations on the proposed importation, NFSP, PANAYFED and CONFED (Confederation of Sugar Producers Associations) headed by Aurelio J. Valderrama, Jr. unanimously pushed for an importation volume of only 350,000 mt.

They cited that, according to the carbonated soft drinks industry, any importation requires a lead time of four to five weeks from the issuance of the sugar order until the arrival of the imported sugar to account for transit time, processing and shipping line booking.

Taking this timeline into account, the arrival of the first tranche of 200,000 mt imported sugar is expected by the third and fourth week of March.

“Last week’s millgate sugar prices decreased by P200 to P300 per bag, compared to prices in the previous weeks. With the arrival of the first tranche of 200,000 mt importation at the time when most planters are still harvesting and milling their canes, aggravated by excessive volume of importation, millgate sugar prices will further drop,” they lamented.

Rojas and Abelita also pointed out that, under Sugar Order No. 6, SRA seems to have waived its regulatory powers in favor of the Department of Agriculture.

“For instance, in the approval of import applications and the allocation of import volumes among eligible importers, the SRA’s function has become merely recommendatory, because the Department of Agriculture has the final decision on such vital importation matters. There seems to be no provision in the sugar order which ensures transparency in the approval of import applications and fairness in the allocation of importation volumes,” they said.

NFSP and PANAYFED reiterated their stand that the importation should be only 350,000 mt; the arrival of the importation should be after the milling season; the importation program should be open to all eligible importers, including producers groups; the allocation of the importation volume among eligible importers should be transparent and fair; and, sugar producers should be allowed to participate and should be given their fair share of the importation volume.
They called on SRA to seriously consider the concerns that they raised.

“Our sugarcane farmers are still suffering from high cost of fertilizer, fuel and other farm inputs. The expected drop in millgate sugar prices due to this excessive and ill-timed arrival of imported sugar will cause more financial distress to sugarcane farmers, particularly the marginal farmers who rely solely on sugar for their livelihood,” they said.*

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