Leaders of two sugar groups said on Wednesday, February 15, that the 440,000 metric tons of sugar to be imported is more than what is needed and could drive down domestic millgate prices to the detriment of small farmers.
The impending importation of 440,000 MT of sugar will trigger an oversupply that will cause more financial suffering to sugarcane planters, particularly the marginal farmers, Enrique Rojas, National Federation of Sugarcane Planters president, said.
“The 440,000 MT importation is more than enough for our projected production shortfall. NFSP, together with CONFED (Confederation of Sugar Producers Association) and PANAYFED (Panay Federation of Sugarcane Farmers), recommended that the importation be only 350,000 MT, but apparently our recommendations fell on deaf ears,” he said.
With this oversupply of sugar, there is only one direction for millgate sugar prices to go, which is down, Rojas said.
Rojas also said the arrival of the first 200,000 MT importation before the end of March will most probably further depress millgate sugar prices, which already decreased by P200 to P300 per bag last week compared to prices in the previous weeks.
“Most sugarcane planters are still harvesting and milling their canes. The ill-advised schedule of arrival of the first 200,000 MT imported sugar before the end of March will surely be detrimental to us,” Rojas said.
“We are still suffering from high cost of fertilizer, fuel and other farm inputs. The expected drop in millgate sugar prices due to the oversupply of imported sugar will cause more financial suffering to sugarcane planters, particularly the marginal farmers who rely solely on sugar for their livelihood”, Rojas warned.
CONFED
CONFED president Aurelio Valderrama Jr. said the 440,000 MT is higher than the 350,000 MT they recommended and is scheduled for arrival earlier than proposed.
It may have a negative effect on current millgate prices since milling is still on-going, he said.
Valderrama also noted that under Section 5 of Sugar Order No 6, the Department of Agriculture (DA) has final discretionary authority to approve import applications.
This is the first time such a condition is provided. This could constitute excessive discretionary power granted to the DA and is a possible circumvention of the Sugar Industry Development Act (SIDA), he said.
Valderrama also said there is no provision that ensures transparency in the granting of import permits with too much discretionary power in the hands of DA.
“CONFED reiterates its earlier recommendation for a transparent, fair and equitable importation program, open to all SRA-accredited international sugar traders and with the participation of sugar producers on a pro-rata basis, for a total volume of 350,000 metric tons to come in two tranches (175,000 MT in July 2023 and another 175,000 MT in August), subject to evaluation of actual market conditions,” Valderrrama said.
He also said that CONFED member associations and cooperatives have expressed their interest in applying for import allocations subject to compliance with all legal requirements.
“We ask SRA to consider this as our desire to provide members equal opportunity to participate in programs that will affect them directly,” he added.
UNIFED
United Sugar Producers Federation president Manuel Lamata, on the other hand, said UNIFED agrees with the importation of 440,000 MT of sugar if refined.
“This would eliminate the speculation of the traders that we will lack sugar at the end milling. This will also bring down runaway retail prices to a level affordable to the consumers and bakers,” he added.
Sugar Order No. 6 allowing the importation of 440,000 MT will take effect on February 20.
The 200,000 MT is allocated for “consumers” defined as manufacturers, industrials, retailers, repackers, wholesalers and trader) and 240,000 MT will be a buffer stock for release to consumers upon approval of the SRA Board, SO 6 states.*
