Sugar Producers Call For Reclassification of Export Inventory for Domestic Sale

Negros-based sugar producers have urged President Marcos to allow their “homeless” sugar to be up for domestic sale. “Homeless” sugar is the government’s inventory that is allocated for export to the United States. Producers Central Azucarera de Bais Inc. (CAB) and Central Azucarera de San Antonio Inc. (Casa) stated that they have a combined volume of 9,679 metric tons (MT) of outstanding class A raw sugar.

The firms have called on the Sugar Regulatory Administration (SRA) to reclassify their raw sugar into class B stocks. This move enables the inventory to be sold to the local market which will ease the growing sugar crisis. The SRA earlier admitted that the country’s raw sugar supply may be depleted within August. CAB and Casa also sent a letter to the President, who also currently serves as the Agriculture Secretary, last month. In it, the producers appealed for the reversal of the SRA’s “unreasonable, arbitrary and discriminatory” denial of their application for sugar reclassification.

CAB and Casa are holding on to their sugar inventory, which consequently made it “homeless.” This was done as the firms “vigorously opposed the SRA’s pernicious and unabated practice of forcing producers to quedan sugar for export, even as domestic prices were significantly higher.” The quedan system provides justification for the government to limit the amount of sugar in the country.

In their letter, the firms also cited a report from the US Department of Agriculture Global Agricultural Information Network. The report noted that the country’s average domestic consumption of sugar had reached about 2.3 million MT over the previous three crop years. This significantly exceeded the Philippines’ average production volume of only 2 million MT.

“The SRA allocated export sugar only to resort to importation (through its so-called expert replenishment scheme) because the said export depleted the already short sugar supply,” the producers added. Ultimately, CAB and Casa are asking the government to reassess the mandatory sugar export system. They also cited a 2021 policy discussion paper by the National Economic and Development Authority (NEDA) to support their stance.

“The allocation of quedans for sugar exports to the US has outlived its usefulness and introduces unwanted distortions in the market,” expressed the NEDA policy paper. It also notes that the allocation appeared “incongruous,” particularly as the domestic requirement has matched or exceeded production. However, the SRA continues to stand by the quedan allocation for continued access to the preferential US sugar market.

Source: Inquirer