Rift within the SRA

By Modesto P. Sa-onoy

The Sugar Regulatory Administration is a collegial body composed of representatives from the producers (millers and planters) and the government that also represents the interests of the consumers. It is the government agency tasked to protect the industry and promote its well-being. Of the three members the government representative is the chairman as well as the administrator.

The sugar industry is in dire straits these days and had been for years with its dim prospects of regaining its high perch in the country’s economic totem pole.

The main issue these last few years is the liberalization of imports of sugar. The price of domestic sugar is high compared to the imported ones. Compounding the sugar producers’ lament is that mill gate prices are low if one considered the cost of production and the returns to the investments of the planters.

Import liberalization, a demand from food and beverage processors, has many merits but the continued survival of the industry runs smack into this demand. Understandably sugar producers, planters and millers, are up in arms against unregulated or permissive importation.

Last Thursday, SRA Board members Emilio Yulo and Roland Beltran revealed the alleged agreement between Trade Secretary Ramon Lopez and SRA Administrator Hermenegildo Serafica – the latter two had agreed in principle that “domestic food processors and other end-users should be allowed to import sugar if the price of locally produced sugar cannot match the P1,900 per bag of imported sugar.”

That is a diplomatic way of saying, “go ahead and import” considering the conditions under which imports would be allowed.

SRA statistics show that as of December 29, 2019, the price of raw “A” or US destined sugar was P1,249.27 per bag, “B” sugar for domestic market was P1,508.22 or a composite price of P1,495.27. But this sugar and had to be hauled from the mill and refined for food processing and marked up. The price story changes when sugar reaches the market.

The Metro Manila prices, according to SRA, as of December 28 last year had an average price for refined at P2,176 per 50Kg bag but the prevailing price was P2,200.

The producers have reason to vehemently complaint at an apparent surrender of Serafica to the demands of the processors. Serafica denied the charge.

Yulo and Beltran said that arriving at a benchmark price without consultation with stakeholders is disastrous for the producers and an indication that the administrator is dealing with the market stakeholders unilaterally for whatever reasons he alone can tell.

Reports quoted the two SRA officials saying that “Serafica must not attribute such agreement to the SRA, as they have not been consulted about the matter, much less our constituency that has been questioning the recent statements and or agreements made by Secretary Lopez in that meeting with Administrator Serafica and domestic food processors.”

The two also issued a veiled threat saying, “We would also like to caution the administrator in making commitments or decisions without consultation as any position he takes can be construed as a policy statement which can be disastrous to the industry if not properly consulted.” Harsh words, indeed.

Yulo and Beltran added that producers had raised the concern over the reported Lopez-Serafica agreement, but they could not answer because they were not consulted. “We had to parry questions and accusations from our constituents as a result of the recent pronouncements of Sec. Lopez, attributing the same to the administrator.”

The producers had been working hard and trying to pull every string to get government to abandon the liberalization of sugar imports. In fact, there is a Senate resolution against this move but if the report of Lopez’s statement were true then that resolution had fallen on deaf ears.

While the two SRA members reiterated that importation is not the solution to “alleged high domestic prices of sugar” they have not also presented any “solution” to the reality that SRA statistics reveal. High sugar prices are not allegations. They are only cheaper at the mill’s gate, but they know sugar passes through a series of processes along the pipeline until it reaches the consumers or users. And along the way, each station imposes a fee and a profit.

The question however is: did Serafica make a commitment without consultation? Was there something highly confidential that the two other SRA officials were ignored?