‘Everything manipulated’

Problems confronting the sugar industry should have not existed if the Sugar Regulatory Administration is run by competent officials, sugar producers said Tuesday amid the controversy facing the beleaguered industry.

“Everything has been manipulated, from the SRA to the traders, it’s a big business for them,” said Manuel Lamata, president of the United Sugar Producers Federation, regarding the supposed shortage that the SRA wanted to solve through importation.

Lamata’s group consists of sugar planters in Negros that make up 60 percent of local sugar production.

“Reorganize SRA, once competent people are running the agency, this whole mess is going to disappear,” he said.

SRA officials with their cohorts who are members of the cartel in the sugar trade have exploited the US quota system that captured a substantial portion of local production for exports to satisfy a colonial-era arrangement.

Sugar planters cited a 2021 study by the National Economic and Development Authority which indicated that the US quota system through allocation of quedans (warehouse or storage receipts) for sugar exports “has outlived its usefulness, and introduces unwanted distortions in the market.”

“It introduces a distortion that is suspected to yield substantial economic rents or unwarranted profits to certain unscrupulous elements in the industry. There are allegations in the industry that ‘A’ sugar quedans, which fetch lower prices given the market segmentation, have somehow found their way to be improperly sold in the higher-priced domestic market,” according to the NEDA report.

A trader pointed to the study as proof of the “counter-productiveness” of the ‘A’ US export quedan.

Convert, not import

“Conversion of domestically produced export-class sugar to Class B raw sugar must take precedence over importation. It addresses the shortage while favoring domestic producers and results in a lower import volume needed,” the trader urged.

Even in 2018, the SRA Board was against the conversion of sugar for export to Class B, insisting that there was ample supply even as industrial users like Coke were already complaining about the lack of sugar in the domestic market.

“It was only after (former President Rodrigo) Duterte issued Administrative Order 13 directing the SRA and DA to prioritize the needs of the domestic market due to a severe shortage in supply that the SRA Board took a 180-degree turn and allowed conversion of outstanding export sugar to Class ‘B’ domestic sugar,” the trader added.

Lately, however, the SRA has again frowned upon the conversion of sugar earmarked for the US quota scheme for local use.

The shortage would have been effectively covered by local output and the conversion of a portion of the quota allocation to serve the local market.

SRA revamp overdue

Many in the industry backed the revamp of the SRA and the removal of administrator Hermenegildo Serafica.

“Good riddance, you have caused damage to the industry. It is unbelievable,” Lamata said.

It was Serafica who said the market had run out of sugar but Lamata said, “when you look for sugar in retail stores, it is available but the cost is prohibitive.”

“We do not conform with the price, Imagine they buy sugar from us at P45 per kilo and they are selling at P100 to P110 per kilo. Greed is too much, it has to be stopped,” according to Lamata.

“Now regarding the clamor of the bottlers (soft drinks manufacturers) that sugar supply had run out, it should be viewed about the importation of 200,000 metric tons of refined sugar under Sugar Order 3 which came in June plus another 20,000 metric tons on its way,” the head of the Negros sugar producers group said.

No shortage but overpricing

“Another 130,000 MT of these imports remain in the warehouses, so what gives, what’s going on?” he asked.

“There is no shortage of supply but there’s overpricing of the product,” he noted.

Regarding SO 3 issued during the term of President Duterte, Lamata said the importation was allotted exclusively to industries such as bottlers.

“If there were already concerns then about shortages, it should have been divided in the middle, half for consumers and a half for industrials, I would have no problem with that,” he added.

Lamata said if no destructive typhoons hit the country until the end of the year, then local producers can supply the market.

“Harvest is dependent on the weather. If the weather is good and it cooperates then we have a good crop,” he said.

He added: “If the current weather holds up, yes we are going to have a good crop and yes we can supply the demand of the market.”

With excess imports remaining from the previous order, SO 4 was then issued providing for the importation of 300,000 MT.

“I wrote them a resolution. In the first place, they told us: ‘This is what the President wanted because it is an emergency and because the prices are too high, so who am I to question the wisdom of the President?’” Lamata said.

“So I wrote and said that I agreed with 300,000 metric tons of refined sugar imports and lo and behold the SO 4 came out, 50-50, 150,000 raw or brown and 150,000 refined sugar which I totally disagreed with because it will come in October or November right during the milling season,” he said.

“Who is going to profit from these, only the mills which have refineries that can process brown sugar that is coming in because they will collect refining charges,” he said.

Lamata added: “Imagine, we have had stability in the past 10 to 20 years, and now, just two to three years ago, we are in a mess because of the mishandling of the SRA in cahoots with unscrupulous traders.”

Awaiting

Meanwhile, Press Secretary Trixie Cruz-Angeles, in a text message to Daily Tribune Tuesday, said Malacañang will make the announcement “as soon as the President responds” to the letter of Central Azucarera de San Antonio Inc. chairman and president Antonio Stephan Chan’s letter dated 4 July.

Chan claimed stocks in the country are enough to satisfy market demand and that importation will not be needed if sugar allotted to the United States is reclassified to allow its supply to the domestic market.

‘B’ classification

SRA Acting Administrator David John Thaddeus Alba said Tuesday the Sugar Board was recently convened by the President and told to “immediately come up with Sugar Order No. 1.”

“The Sugar Board recommended that all sugar for this crop year will be classified as “B” sugar or domestic sugar,” Alba said. “There will be no allocation for the US quota. This will of course be subjected to thorough consultation with all industry stakeholders.”

The SRA also acknowledged that there is a shortage of premium refined sugar being experienced by top soft drink maker Coca-Cola Beverages Philippines.

“We are currently consolidating the data as to how much is really needed so we can recommend the necessary actions we need to take to the President,” he added.

He said that while Coca-Cola’s sugar supply hits a critical level, he said Pepsi and RC Cola “still have their available supply as per our records.”

“The Sugar Board just took office, and we ask our industry partners to indulge us with some time so we can address this issue based on established facts,” he noted.

MICHELLE R. GUILLANG AND MARIA ROMERO

Leave a Reply

Your email address will not be published. Required fields are marked *