The Sugar Regulatory Administration (SRA) has decided to finally allow the private sector to import 200,000 metric tons (MT) of sugar to avert further increases in retail prices, citing supply issues arising from a lower production this year.
On Monday, the SRA board met with Agriculture Secretary Emmanuel Piñol to draft a resolution that would ensure a stable supply ahead of a projected drop in the commodity’s output.
According to SRA’s latest sugar order, production for the current crop year would not be enough to keep up with the increased demand for sugar as manufacturers shifted to using local sugar from high-fructose corn syrup to avoid paying higher taxes brought by the new tax law.
With the current projected output at 2.27 million tons —230,000 MT lower than last year’s production at 2.5 million MT—Piñol said there was a need to import to stabilize the prices and supply of the commodity.
While the private sector has always been allowed to import sugar, the last time the regulating body issued a clearance for importation was in 2015 when sugar production dropped.
Of the 200,000 MT of sugar to be imported, half would be allocated for the purchase of bottlers’ grade refined sugar, while 50,000 MT would be used for standard grade refined sugar. The remaining 50,000 MT would be used for direct consumption.
“Any importation must be reasonably profitable to the producers and fair to consumers,” the sugar order read.
Since the beginning of June, average price of raw sugar climbed by 42 percent to P2,070 per 50-kilogram bag from the standard rate of P1,450 per bag. Retail price of sugar has also risen by 2.1 percent to P48.23 a kilo from P47.22 a kilo in January.
Kissinger Sy, president of the Philippine Confectionery Biscuits and Snack Association (PCBSA), said the 18-member group welcomes the agency’s decision, noting that they have asked the Department of Trade and Industry to allow them to import 15,000 MT of sugar for their operations.
Their only worry, Sy said, was that the SRA might impose a huge royalty fee to be paid to the farmers by the private sector as part of a profit-sharing scheme whenever the industry was allowed to import.
“The duties that we have to pay for the farmers may only offset any savings we may get from importing. The cost may be the same if we source locally,” he said.
According to Piñol, the sugar imports were meant to only cover the tightness of the supply until the next crop year in September. The additional sugar imports will help maintain a healthy buffer stock, which, in turn, will lower both the mill-gate and retail price of sugar.