BACOLOD City – The Confederation of Sugar Producers Associations (Confed) headed by Aurelio Gerardo J. Valderrama Jr., has recommended the importation of a more conservative volume of sugar, compared to the proposed 450,000 metric tons or “two months of buffer stock” being mulled by the Department of Agriculture and the Sugar Regulatory Administration (SRA).
Confed, which submitted its letter to the SRA last Jan 27, 2023, further cautioned the sugar regulating body to stagger the volume of importation, and schedule its arrival judiciously, so that it will not adversely affect mill gate sugar prices at the tail end of the current milling season and at the start of milling in the coming crop year.
The federation’s letter was in response to the call by SRA for comments and recommendations from industry stakeholders regarding the request for importation made by the carbonated soft drinks (CSD) industry, represented by the manufacturers of Coca-Cola, Pepsi-Cola and RC Cola.
In a letter to Pres. Ferdinand R. Marcos Jr. dated Jan 6, the CSD industry informed him that the current sugar inventory will last only until the second quarter of 2023.
The projected sugar shortage endangers the continued operation of their bottling plants, risking the livelihood of thousands of employees, dealers and downstream businesses.
Thus, the CSD industry requested the President to put in place a supplemental sugar importation program by the end of the first quarter of 2023, considering that it will take “about 4-5 weeks lead time to account for transit time, processing and shipping line booking”.
They warned that any delay in the arrival of sugar supply might result to the slowdown, or even shutdown, of their operations.
However, the letter-request did not contain the proposed volume of sugar needed by the CSD industry and the proposed schedule of arrival of their importation.
Three planters’ federations – Confed, the National Federation of sugarcane Planters (NFSP) headed by Enrique D. Rojas and Panay Federation of Sugarcane Farmers headed by Danilo A. Abelita – submitted separate letters to SRA reserving their final decision on the CSD industry’s request, until such time that SRA and the CSD industry provide them with specific figures to justify the request.
Meanwhile, President Marcos said the country needs two months’ worth of buffer stock to ensure reliable sugar supply and stable retail prices of sugar.
The President later cited 450,000 MT as the proposed volume for importation, which was met with skepticism by most sugarcane farmers.
The SRA submitted to Confed the Pre-final Crop Estimate and the Raw & Refined Sugar Supply & Demand Projection for Crop Year 2022-2023, as well as the Summary of Actual & Projected Sugar Requirements of the CSD Industry.
SRA has not submitted its draft program for the volume and schedule of arrival of the proposed 450,000 MT importation.
Confed replied to the data provided by SRA, recommending for a more conservative volume for importation and the staggered arrival of the sugar imports, such that the importation will not depress mill gate prices at the end of the current crop year’s milling, as well as during the start of next year’s milling season.
Moreover, Confed urged SRA to institutionalize an orderly sugar policy mechanism by establishing “trigger points (determined through timely assessment of consumption versus supply trends) that will signal the need for consultations with the industry to determine the appropriate sugar policy at any given time”.
Towards this end, Confed recommended that SRA should formally activate and engage the Stakeholders Consultative Assembly, setting guidelines for its composition and representation; the manner, schedule and venue of consultations; and the provision of pertinent and timely information for the guidance of all stakeholders.