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OPEN LETTER TO THE PHILIPPINES' SUGAR LEADERS (by Primo A. Steven Chan)

Milling is almost finished and once again our sugar leaders are already planning and discussing next year's strategies. In relation to this, I want to share some observations on the sugar situation and the "A" Sugar allocations meant for the US market. Kindly let me know what you think about these observations in the comments below.

From 2016 to 2019, the Sugar Regulatory Administration (SRA) approved over 2.1M tons of sugar imports. That's 500,000 tons of imported sugar that enters the Philippines. This year, despite the COVID pandemic, I still expect total sugar imports to reach around 300 to 350 thousand tons by August.

We are perennially short of sugar in the Philippines. I believe we have no business exporting sugar to the US to meet our “A” sugar quota.

Take note that when we export sugar to the US, the exported sugar is typically P 370 cheaper per bag than local sugar. Unbelievably, we are still being made to subsidize the U.S. quota.

In the first place, we are not even obliged to serve that US quota. So there is no surplus of sugar, no obligation to send sugar to the US and we, the Philippine sugar producers lose money. What is the reason for this then? What is the story? I believe it goes like this…

1.) They issue sugar orders allocating 5% of all the sugar we produce to the US quota and they give exclusive import "replenishment" rights to favored exporters. This is to the traders advantage.

2.) The exporters then ship the cheaper 5% sugar out to the U.S. and away from our premium priced local market. This again is to the traders advantage.

3.) With the Philippine’s supply diminished, those same exporters will now import the "replenishment" volume of sugar and flood the Philippines premium priced local market with cheap foreign sugar. This, of course, is to the advantage of traders.

Gina 1.2.3 lang ang mga producers and sugar planters!
(The producers and planters are just being duped!)

The added harm to the industry is when the SRA diverts 105,000 tons of our sugar out to be exported, we will now need 105,000 "replenishment" tons of imported sugar. (Daw in and out lang!) The country will now require 605,000 Imports instead of just 500,000. And as we all know, imported sugars is very cheap. We are being killed slowly.

We don’t have a surplus of sugar to export. So why are we exporting? We don’t have an obligation to export to the US. So why are we exporting? We producers lose P370 / bag everytime we export sugar. SO WHY ARE WE EXPORTING? To top it all off, the “replenishment” sugar that is being imported hurts our prices. So I ask again, why are we exporting? These are the facts.

But maybe there is another reason. Maybe I am wrong. Is there something that I failed to consider? I want to know. So this is an open call to any sugar leader out there listening, any government official whose job it is to protect our industry, any trader, any lawyer or anyone from Tatak Kalamay. My question is this…

“Why are we still exporting sugar?”

by Primo A. Steven Chan

Photo by Andreo Bongco


Digitalhacienda.com


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