Lower Import Fees May Trigger Sugar Influx

By Dolly Yasa

BACOLOD CITY – Sugar planters are concerned that lowering proposed import fees on sugar substitutes could lead to an influx of alternative sweeteners, further reducing mill gate sugar prices.

The Sugar Council and the National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP) raised this concern over the weekend following reports that the Sugar Regulatory Administration (SRA) is planning to reduce the proposed PHP 10 per 50-kilo bag fee on sugar alternatives under Tariff Line 1702. This includes glucose, fructose, artificial honey, palm sugar, and maltose.

In a December 19 report by BusinessWorld Online, Agriculture Secretary Francisco P. Tiu Laurel Jr. suggested that competition from imported artificial sweeteners has contributed to the decline in mill gate sugar prices.

In a letter dated September 16, the Sugar Council and NACUSIP asked Secretary Laurel, who also chairs the Sugar Board, to provide data on how artificial sweeteners impact the consumption of locally produced sugar.

In response, the SRA drafted a sugar order proposing a PHP 10 import clearance fee for sugar alternatives. However, beverage manufacturers claimed the fee would lead to inflation, prompting the SRA to consider reducing the fee by a “considerable” amount, as reported by The Philippine Star on December 20.

The Sugar Council and NACUSIP supported the SRA’s move to monitor import volumes but warned that lowering the fee could increase the influx of sugar substitutes and drive down sugar prices.

Except for a slight uptick last week, mill gate sugar prices have dropped significantly.

According to the latest SRA data, prices fell from an average PHP 2,827.85 per 50-kilo bag in the week ending October 20 to PHP 2,498.55 in the week ending December 1.

At one mill, prices recently dipped to PHP 2,450 per bag, barely above production costs.

The arrival of 240,000 metric tons of imported refined sugar under Sugar Order No. 5 for Crop Year 2023-2024 and increased imports of sugar substitutes have been blamed for the decline. Imported refined sugar and alternatives reduce demand for locally produced raw and refined sugar.

Popular artificial sweeteners like sucralose, aspartame, and acesulfame potassium displace locally produced sugar.

Sucralose is 600 times sweeter than sugar, while aspartame and acesulfame potassium are 200 times sweeter.

Philippine Statistics Office data show combined imports of these sweeteners increased from 950,989 kilograms in 2022 to 1,100,783 kilograms in 2023.

Sucralose imports rose from 267,567 kilograms to 433,775 kilograms, while aspartame imports jumped from 416,662 kilograms to 631,767 kilograms.

Acesulfame potassium imports, however, fell from 266,760 kilograms to 2,241 kilograms.

Agriculture Secretary Laurel attributed increased artificial sweetener imports to the projected drop in sugar production due to El Niño and La Niña weather conditions.

The Sugar Council and NACUSIP called for stricter measures to discourage sugar substitute imports, citing the impact on thousands of sugarcane farmers and their families.

“Instead of discouraging these imports, why is the SRA proposing a lower import clearance fee for sweeteners that displace locally produced sugar?” the groups questioned.