By Dolly Yasa
BACOLOD City – The impending importation of 440,000 metric tons (MT) of sugar by the government has caused apprehension from a sugar group and a lawmaker here.
In a statement, the Confederation of Sugar Producers Associations (CONFED) raised serious concerns on the importation, including the drop in sugar mill gate prices, with the issuance of Sugar Order (SO) No. 6 (2nd Import Program for Crop Year 2022-2023) issued by the Sugar Regulatory Administration (SRA).
CONFED said the sugar order allows the importation of 440,000 MT of sugar, with the first shipment of 200,000 MT to arrive before April 1, and the balance of 240,000 scheduled to arrive April 1 onwards, which will serve as buffer stock.
“The 440,000 MT is higher than the 350,000 MT recommended by CONFED and is scheduled for arrival earlier than proposed. It may have a negative effect on current mill gate prices since milling is still on-going,” CONFED president Aurelio Valderrama Jr. said.
Former SRA board member now 5th District Rep. Emilio “Dino” Yulo said in a radio interview that the planned importation is a case of “wrong timing.”
Yulo also said that the sugar importation should be delayed.
CONFED also raised its fears about the emasculation of SRA’s regulatory powers, as SO 6 appears to strip SRA of the authority to approve import applications and allocate sugar importation volumes to eligible traders.
“Under Section 5, DA has final discretionary authority to approve import applications. This is the first time such a condition is provided.
“This could constitute excessive discretionary power granted to the Department of Agriculture and a possible circumvention of the Sugar Industry Development Act (SIDA),” CONFED pointed out.
The planters federation also noted that there is no provision in Sugar Order No. 6 that ensures transparency in the granting of import permits, leaving the door open for abuse in awarding import permits to favored traders only.
“There is no formula that establishes the volume that any particular applicant may apply for. Again, this allows for too much discretionary power in the hands of DA (not SRA, which is left with only recommendatory authority under Sec.5 of S.O. No. 6, 22-23),” the group emphasized.
CONFED cited that, in contrast to Sugar Order No. 6, Sugar Order No. 2 of Crop Year 2022-2023, particularly Section 5 thereof, has a specific provision for volume per eligible importer, which is pro-rated based on excise tax payments of the said importer.
The group was also concerned that the waiver or reduction of Performance Bond by the Department of Agriculture, takes away the authority from SRA, the agency imposing such requirement, which again is open to possible abuse of discretion.
Moreover, CONFED stated that the definition of “Consumers” under Definition of Terms (Section 2) covers end-users (manufacturers and industrials), retailers, repackers, wholesalers and traders, but does not include actual final consumers.
This is in relation to Section 3 of the new Sugar Order (Eligible Participants), which requires applicant traders to be actually engaged in the “selling of physical sugar to the ‘Consumers’.”
“If a Producers’ Coop which is an SRA-accredited Trader only sells physical sugar to final consumers, and not to the other ‘consumers’, it may not qualify for import allocation.
This limits the number of Producers’ cooperatives that may qualify,” CONFED further pointed out.
CONFED reiterated its earlier recommendation to SRA for a transparent, fair and equitable importation program, open to all SRA-accredited international sugar traders and with the participation of sugar producers on a pro-rata basis, for a total volume of 350,000 metric tons to come in two tranches (175,000 MT in July 2023 and another 175,000 MT in August), subject to evaluation of actual market conditions.
“While CONFED had hoped, as it continues to hope, that SRA sees fit to consider our recommendations in the spirit of collegiality and consultation, Sugar Order No. 6, Series of 2022-2023, falls short of the recommended transparency and fairness provisions that would ensure equitability for all stakeholders.
Be that as it may, CONFED further said in a statement it issued, that its member Associations and/or Cooperatives have expressed their interest in applying for import allocations subject to compliance with all legal requirements.