The Department of Agriculture has approved the Sugar Regulatory Administration’s plan to export 100,000 metric tons of raw sugar to the US to reduce domestic raw sugar supply and help lift sagging farmgate prices.
While the measure aims to drain excess domestic supply, industry leaders on Tuesday, Jan. 13, called for transparency and warned that the program must not be used as a “backdoor” for automatic import replenishment.
Agriculture Secretary Francisco P. Tiu Laurel Jr. said “We will export raw sugar under the US quota system as soon as possible to provide the industry immediate relief.”
The export plan comes as the DA and SRA extended the moratorium on sugar imports until December this year, maintaining protection for domestic producers as raw sugar output improves and inventories remain elevated.
Even with the extended import freeze, however, local sugar prices continue to languish, the DA said.
Quota prices under the US system are typically higher than world market levels, giving Philippine exporters a more lucrative outlet compared with selling on global spot markets, the DA added.
Sugar Regulatory Administrator Pablo Luis Azcona said the export approval reflects significantly higher output this crop year and is a timely step in balancing supply and demand.
Azcona also cited a surge in artificial sweetener and other sugar substitute imports, which have effectively doubled to volumes equivalent to roughly more than 500,000 metric tons of raw sugar.
Officials warn these substitutes are diluting demand for locally produced sugar and further contributing to price softness, the DA said.
ARTICICIAL SWEETENERS
Tiu Laurel said the DA will closely monitor the importation of artificial sweeteners and sugar substitutes and might consider regulating the entry of such, as chemical sweeteners—whose sweetness is 200 times that of regular sugar–if market disruptions persist.
He also plans to ask the Department of Health to review potential public health implications of widespread use of intense sweetening agents, which are often hundreds of times sweeter than sugar.
Recent guidance from the World Health Organization suggests non-sugar sweeteners may not offer clear long-term benefits for weight control and could carry health risks.
OTHER SOLUTIONS
“There are a lot of long-term solution suggestions, but we need a short-term solution to quickly help the farmers now,” Tiu Laurel said.
All the suggestions will be looked into and considered, he said.
IMPORT REPLENISHMENT
Aurelio Gerardo J. Valderrama Jr., Confederation of Sugar Producers Association president, in a press statement said the industry will most certainly appreciate any price improvement arising from this measure, following the government’s previously announced “import freeze”.
But pending the release of an appropriate Sugar Order which will provide the missing details, “we reiterate our position that this export program should not be accompanied by an automatic import replenishment program”, he said.
“Any future importation to cover domestic shortfalls should be subject to clearly defined guidelines, particularly in terms of volume, timing, implementation mechanics, and stakeholder consultations,” Valderrama sad.
CONFED earlier submitted a proposed government buying program anchored on government’s willingness to mitigate the effects of over-importation through appropriate policy measures.
“We remain firm in our resolve to seek both short-term solutions and a long-term institutional framework that will prevent the reoccurrence of the crisis we face today,” Valderrama said.
LABOR CALLS FOR TRANSPARENCY
The SRA announced intention to export sugar comes at a critical time for the Philippine sugar industry, which has been grappling with falling prices, Roland de la Cruz, National Congress of Unions in the Sugar Industry of the Philippines, -Trade Union Congress of the Philippines (NACUSIP-TUCP) president, said.
But a matter of immediate concern is the absence of a publicly available sugar order detailing the framework and guidelines for this export program, he said.
“The lack of public disclosure raises questions about transparency and stakeholder engagement in the decision-making process,” de la Cruz he said.
“If government is willing to subsidize the financial impact on this band-aid solution, why should not the government allocate funds for the government-financed domestic sugar buying program that we have been endorsing with other sugar stakeholders”, he said.
Transparency regarding subsidy mechanisms is vital for public confidence in the program, he added.
“Will the unpublished sugar order include a provision for an import replenishment ratio? It is crucial for stakeholders to understand whether the export of domestic sugar will be offset by corresponding import allocations, and if so, at what ratio,” Dela Cruz said.
Stakeholders are looking for long-term strategies that address the root causes of market instability and ensure the viability of the Philippine sugar industry for years to come, he said.
He asked why the SRA was rushing to implement a Sugar Export Program more than a week before the scheduled Congressional-Senate consultation on the current sugar industry issues on January 23.
“Is this hasty but long-delayed action aimed to present a “Perfectum Est” narrative during the said consultation? De La Cruz asked.
“We also call on the Land Bank of the Philippines to issue a moratorium on penalties, interests and other charges on loans incurred by Agrarian Reform Beneficiaries and their organizations as the current slump of sugar prices will be impossible for the small farmers and ARBO’s to comply with loan repayments”, Elisama Gregorio, chairperson of the NACUSIP Agrarian Reform Beneficiaries Council, added.
Gregorio also urged the SRA and all relevant authorities to provide clear, timely, and comprehensive information on the proposed export program.*