The Confederation of Sugar Producers Associations Inc. (CONFED) on Friday, Oct. 10, issued an urgent call to the Sugar Regulatory Administration (SRA) for transparency and action on the decline in millgate prices of sugar and molasses.
CONFED president Aurelio Gerardo J. Valderrama Jr. in an open letter to SRA Administrator Pablo Luis Azcona expressed concern over the worsening state of the sugar industry, particularly the steep decline in both sugar and molasses prices compared to last year.
This has had a severe impact on the livelihoods of planters, millers, and stakeholders across the country, Valderrama said.
“Given the recent corruption scandals that have rocked the country, we strongly urge you to act decisively, in full view and with the interest of the people who stand to lose the most,” Valderrama told Azcona, as he called for a prompt and transparent response.
“At the heart of this crisis is a series of policy decisions — most notably the over-importation of sugar and molasses, which have flooded the market, depressed prices, and left producers without buyers or bargaining power,” he said.
Compounding the problem is the unmonitored influx of artificial sweeteners, which has further disrupted market demand, Valderrama said.
These developments have triggered what can only be described as a full-blown market destabilization, he said.
Given that the SRA has regular access to real-time production and withdrawal data, Valderrama asked why this situation was not foreseen.
“Were the implications of oversupply and the presence of sugar substitutes like artificial sweeteners not considered in your planning and import decisions?” he asked.
Valderrama also asked if risk assessments were made prior to approving additional import volumes.
Based on its mandate to “establish and maintain such balanced relation between production and requirement of sugar and such marketing conditions as will insure stabilized prices at a level reasonably profitable to the producers and fair to consumers” as contained in Section 2(B) of Executive Order No. 18, series of 1986, it is imperative that the SRA ensures protection to all its stakeholders, Valderrama said.
“The situation we now face is not simply an unfortunate market trend but the consequences of poor planning, lack of coordination, and failure to protect the industry from foreseeable risks,” he said.
Given this situation, Valderrama said they require clear and immediate answers to the following questions:
• What is the SRA’s action plan to stabilize sugar and molasses prices?
• If prices continue to fall, what protective measures will be put in place to prevent further losses to farmers and industry players?
• How does the SRA intend to address the oversupply, and what mechanisms are being explored to balance the market?
• How will the agency regulate or monitor the use of artificial sweeteners that are displacing locally produced sugar?
CONFED and its network of stakeholders remain open to collaboration with the SRA provided that all discussions are conducted in an inclusive, transparent, and honest manner, he said.
In order to understand the concerns and share the burden of finding solutions, it is imperative that proper and timely data be shared in order to understand the problem, Valderrama said.
“True leadership requires accountability, especially since the future of our industry depends on the decisions made at present,” he said.*