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Bacolod City, Philippines Thursday, April 4, 2019
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‘Drop in sugar demand,
prices due to AO 13’

 

The drop in the demand for domestic sugar and the corresponding decrease in millgate prices are directly attributable to Administrative Order No. 13, an official of a sugar farmers’ group said yesterday.

AO 13, issued by President Rodrigo Duterte in September last year, removes non-tariff barriers and streamlines the administrative procedures on the importation of agriculture products, including sugar, to tame the price spikes of basic agricultural commodities…(and) to address shortfall on supply and ensure the stable prices of agricultural products in the domestic market”.

Aaron Sorbito, chairman of the ARBs Sugar Farmers Federation–Kilusang Pagbabago, said the drop in domestic sugar withdrawals “simply means that the traditional users of domestic sugar are sourcing their sugar requirements from outside the country.”

He was reacting to the call of the Confederation of Sugar Producers Associations (Confed) for the Sugar Regulatory Administration to investigate the alarming decline in sugar withdrawals, that led to the drop by P50 per 50-kilo bag in millgate sugar prices this week, the press release said.

“Sugar-using industries are now allowed to directly import their sugar requirements, by virtue of Administrative Order No. 13. Thus, demand for domestic sugar has significantly weakened,” Sorbito said.

He added that raw sugar withdrawals dropped 3.57 percent while refined sugar withdrawals dropped almost 36 percent as of March 3, compared to the same period last year.

He said that as per SRA records, refined sugar withdrawals as of March 3 appeared to be higher at about 595,000mt, compared to 539,142mt for the same period last crop year.

“Out of the about 595,000mt refined sugar withdrawals, only 347,000mt came from domestic stocks while about 248,000mt came from imports. Consequently, millgate sugar prices dropped from an average of almost P1,700 per bag last September to only P1,475 per bag this March, the press release said.

Based on SRA reports, the Confed earlier cited that sugar stocks in warehouses all over the country stand at about 1.1 million metric tons, both raw and refined, as of March 17. This inventory is higher by 41 percent, compared to only about 771,000mt during the same period last crop year, it added.

Raymond Montinola of Confed said there is “an excess over last crop year of 321,948.81mt of sugar in our supply chain”, adding that the warehouses of sugar mills in Negros are near their maximum carrying capacity due to the slow withdrawals, which reflected decreased demand for domestic sugar, the press release said.

Sorbito said AO 13 “opened the floodgates for the unregulated importation of agricultural products. Worse, we did not hear anything about this AO from SRA. What has SRA done to protect sugar producers from the ill-effects of AO No. 13?”

“The ARBs and marginal sugar farmers are already feeling the ill-effects of AO No. 13. Compared to the proposed sugar liberalization, AO No. 13 poses a clear and present danger to the sugar industry,” he stressed.

Section 1 (e) of the AO states, “As may be necessary, temporarily allow the direct importation by sugar-using industries to lower their input costs, subject to reasonable regulations.”

“We reiterate our demand for the recall of AO No. 13. We also call on other industry stakeholders to unite and join us in pushing for the repeal of this anti-farmer and anti-farmworker administrative order which will cause the demise of the industry,” Sorbito added in the press release.*

 

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