Confed urges conservative volume of sugar importation

The Confederation of Sugarcane Producers Association (CONFED) has recommended the importation of a more conservative volume of sugar, compared to the proposed 450,000 metric tons “two months buffer stock” being mulled by the Department of Agriculture (DA) and the Sugar Regulatory Administration (SRA).

CONFED president Aurelio Gerardo J. Valderrama Jr. said on Sunday, January 29, that his group sent a letter to the SRA on Friday, to further caution the sugar regulating body to stagger the volume of importation, and schedule its arrival judiciously.

This is needed so that it will not adversely affect millgate sugar prices at the tailend of the current milling season and at the start of milling in the coming crop year, Valderrama said.

Administrator David Alba of the Sugar Regulatory Administration could not be reached for comment Sunday.

CONFED’s letter was in response to the call by SRA for comments and recommendations from industry stakeholders regarding the request for importation made by the carbonated soft drinks (CSD) industry, represented by the manufacturers of Coca-Cola, Pepsi-Cola and RC Cola, Valderrama said.

In a letter to President Ferdinand R. Marcos Jr. dated January 6, the CSD industry informed him that the current sugar inventory will last only until the second quarter of 2023. The projected sugar shortage endangers the continued operation of their bottling plants, risking the livelihood of thousands of employees, dealers and downstream businesses, it said.

Thus, the CSD industry requested the President to put in place a supplemental sugar importation program by the end of the first quarter of 2023, considering that it will take “about 4-5 weeks lead time to account for transit time, processing and shipping line booking”. They warned that any delay in the arrival of sugar supply might result to the slowdown, or even shutdown, of their operations, Valderrama said.

However, the letter-request did not contain the proposed volume of sugar needed by the CSD industry and the proposed schedule of arrival of their importation, he added.

Three planters’ federations – CONFED, the National Federation of Sugarcane Planters (NFSP) headed by Enrique D. Rojas and Panay Federation of Sugarcane Farmers headed by Danilo A. Abelita, submitted separate letters to SRA reserving their final decision on the CSD industry’s request, until such time that SRA and the CSD industry provide them with specific figures to justify the request.

Meanwhile, the president stated that the country needs a two months buffer stock to ensure reliable sugar supply and stable retail prices of sugar.

The President later cited 450,000 mt as the proposed volume for importation.

The SRA submitted to CONFED the pre-final crop estimate and the raw and refined sugar supply and demand projection for Crop Year 2022-2023, as well as the Summary of Actual and Projected Sugar Requirements of the CSD Industry. SRA has not submitted its draft program for the volume and schedule of arrival of the proposed 450,000 MT importation, Valderrama said.

CONFED replied to the data provided by SRA, recommending for a more conservative volume for importation and the staggered arrival of the sugar imports, such that the importation will not depress millgate prices at the end of the current crop year’s milling, as well as during the start of next year’s milling season, he said.

CONFED also urged SRA to institutionalize an orderly sugar policy mechanism by establishing “trigger points, determined through timely assessment of consumption versus supply trends, that will signal the need for consultations with the industry determine the appropriate sugar policy at any given time”.

CONFED recommended that SRA should formally activate and engage the Stakeholders Consultative Assembly, setting guidelines for its composition and representation; the manner, schedule and venue of consultations; and the provision of pertinent and timely information for the guidance of all stakeholders, Valderrama said.

Manuel Lamata, United Sugar Producers Federation (UNIFED) president, said “I sympathize with the labor groups, but they should also consider the consumers, housewives, bakers who are the majority of our customers consuming sugar”.

He said “because of speculations that our production could not cover for the whole year, that is why prices in retail are too high. I am confident the president will make sure the planters will not suffer because of this.”

Rojas said the labor groups are not against importation, per se, but against the unjustified volume of 450,000 metric tons proposed sugar importation.

The labor groups are asking for an explanation from SRA officials why they made a complete turnaround in supporting the 450,000 mt proposed importation now, when they are the same people who opposed the 200,000 mt and 300,000 mt proposed importations last year, Rojas noted

Sugar industry stakeholders deserve an explanation from the concerned SRA officials, he said.

“NFSP remains consistent in our position that the importation should be only for the specific volume needed for the buffer stock, and it should arrive in several properly scheduled tranches after the milling season”, Rojas said.

Alba then representing the Asosacion de Agricoltores de La Carlota y Pontevedra Inc. and the La Carlota Mill District Multi-Purpose Cooperative last year filed a petition before the Regional Trial Court of Himamaylan City in Negros Occidental against then SRA Administrator Hermenegildo Serafica to cease and desist from implementing Sugar Order No. 3 allowing the importation of 200,000 metric tons of sugar.

Himamaylan Judge Walter Zorilla ordered the SRA to cease and desist from implementing Sugar Order No. 3.

The judge, in his 4-page order, said it is readily apparent that the petitioners may stand to suffer greatly and irreparably if the questioned sugar order will be implemented.
The two organizations of Alba and UNIFED in August 2022 welcomed the scrapping of Sugar Order No. 4 (SO4), a proposed order to import 300,000 metric tons of sugar.

“With the start of the milling season, the need to import additional sugar is ill advised,” Alba said then.

SO4 led to filing of raps against the former SRA board members for allegedly being illegally issued without the approval of the president who is concurrently the agriculture secretary.

However, on December 29 the Office of the President (OP) cleared former Agriculture undersecretary Leocadio S. Sebastian, Serafica, and former SRA board members Roland Beltran and Valderrama of the charges in connection with the supposed illegal issuance of Sugar Order Number 4.

The OP said the four are absolved of liabilities since the issuance of SO4 was “done in good faith”.*

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