The National Federation of Sugarcane Planters commended yesterday Finance Secretary Carlos Dominguez III for directing the Bureau of Customs to step up the drive against sugar smuggling.
Dominguez issued the order recently amidst reports from the Bureau of Internal Revenue that some traders in Cebu are importing sugar at a much higher volume than what is allowed under the Sugar Regulatory Administration’s Sugar Order No. 3, titled “A Sugar Export Replenishment Program”.
Sugar Order No. 3 allows traders who exported sugar to the US under the US Sugar Quota Program to import an equivalent volume of sugar as replenishment to what they actually exported.
“When SRA instituted the ‘A’ sugar export replenishment program early last month, NFSP already warned that some traders might exploit the program to smuggle imported sugar in much higher volume than what is allowed under the program,” NFSP president Enrique Rojas said.
“We are happy that the DOF has also seen the danger of sugar smuggling in the guise of such program, and thus DOF ordered Customs to be vigilant against sugar smuggling,” he said in a press release.
If smuggled sugar floods the domestic market, it will bring down sugar prices and, consequently, result in low millgate prices at the start of the next milling season, resulting in huge losses to our farmers,” Rojas explained.
Domestic sugar prices are traditionally lower than world market prices, because the world market is a dumping ground for highly subsidized sugar from some sugar-producing countries, who sell sugar at prices lower than the actual world average production cost.
This disparity in prices provides an incentive for unscrupulous importers to smuggle sugar into the country. Sugar industry leaders have expressed apprehensions that some food exporters, who are allowed to import sugar for their export-oriented food products, are importing more sugar than they need, and then leak that sugar into the domestic market.
Rojas urged the Sugar Regulatory Administration, the BOC, and the Bureau of Internal Revenue to exercise utmost vigilance to ensure that only the exact allowable volume of sugar is imported by traders under Sugar Order No. 3.
“Our sugar producers have been suffering from low millgate prices during the current crop year. We hope that government will help us ensure a more reasonable level of prices, which are favorable to consumers and fair to the producers, next crop year,” Rojas said.*