It all adds up

Since last January, sugar producers have been pressing the release to the domestic market of some 9,500 metric tons of sugar earmarked for the United States under the quota program. However, the Sugar Regulatory Administration board, led by administrator Hermenegildo Serafica, had stubbornly shot down the proposal.

Documents obtained by Daily Tribune indicated the persistence of the industry to offer a solution to the supposed sugar shortage, but which the SRA rejected. Typhoon “Odette” hit the country on 16 December 2021, causing serious damage to sugarcane farms amid the La Niña weather episode.

According to the industry’s letter addressed to Serafica, recent developments including the impending shortage and high market prices “underscore the urgent need to tap available export sugars already in the country for domestic consumption.”

“Releasing the significant volume of accumulated export sugars from previous years of at least 9,500 metric tons for domestic consumption would alleviate the shortage, while avoiding the logistical costs involved in the importation.”

The conversion of sugar for export should be given priority and that importation, being a regulatory tool to address a shortage, “can only be utilized as a last resort,” according to the letter.
On 17 February, the industry again issued a plea for the conversion of raw sugar for domestic consumption after the SRA suspended the sugar importation program as a result of a temporary restraining order issued by the Regional Trial Court of Negros Occidental.

The industry cited a statement of SRA Deputy Administrator Guillermo Tejida III, “confirming under oath,” that the conversion of sugar stocks is “an SRA regulatory tool to address supply shortages and rising prices.”

On 2 March, sugar planters again wrote Serafica to underline that “with the import program having been enjoined by the Regional Trial Court of Negros Occidental, there is absolutely no more excuse that you can cite not to convert our available export sugar.”

Moreover, the immediate conversion of all available export sugars will allow the SRA to delay importations further, so as to minimize the producers affected during the milling season.
Then on 12 April, producers again wrote Serafica reminding him of the 9,500 MT of raw sugar sitting inside warehouses, which they said “is just a matter of converting the huge stock of sugar to address the needs of the domestic market.”

The letter then was more assertive, as it indicated that importation cannot be implemented “without first recalling all available/unshipped export sugars that can easily be converted to Class ‘B’ for the domestic market.”

Planters pointedly told Serafica that “to date, you cannot even cite any legal excuse on why you cannot convert our 9,500 MT of export sugar to Class B.”

“Addressing the sugar supply shortage through the conversion of our Class ‘A’ and Class ‘D’ raw sugar is not only feasible but dictated by your mandate ‘to ensure food security’ and, before you resort to importation that will only benefit favored traders, please think of the local producers whose export sugars are trapped and have been rendered homeless because of your inaction.”

Failing to get Serafica’s response, the industry then, on 10 May, sent the Department of Agriculture secretary at that time, William Dar, a letter informing him of the 9,500 MT of idle sugar stock.

“Mr. Serafica appears to have concealed from you the fact that there is over 9,500 MT of available Class ‘A’ export sugar that SRA can very well tap and reclassify as Class ‘B’ sugar to address the shortage situation,” according to the planters.

“Simply put, this substantial volume of Class ‘A’ sugar remains trapped in the country and could not be withdrawn and sold to the domestic market, notwithstanding that Mr. Serafica and the SRA Board could easily authorize its reclassification or conversion.”

The letter told Dar: “This is your opportunity to undo the wrong committed by Mr. Serafica and the SRA Board.”

Then on 28 June, the SRA then lowered the boom on the sugar producers, rejecting the conversion proposal.

“The SRA Sugar Board Chairperson and Department of Agriculture Secretary William Dar together with the millers’ representative in the SRA board, Roland Beltran, agreed with the recommendation of the SRA management to deny your request to reclassify/convert your ‘A’ or US market sugar quedans to ‘B’ or domestic sugar quedans. The resolution was passed last 13 June 2022.”

Adding insult to injury, neither the SRA nor the DA explained what precipitated the rejection of the industry’s appeal.

The issuance of Sugar Order 4 providing for 300,000 metric tons for importation, bypassing President Ferdinand “Bongbong” Marcos Jr.’s approval, provided the missing piece to the artificial sugar shortage puzzle.

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