Govt to tap MAV scheme for sugar imports

PRESIDENT Marcos Jr. has ordered the Department of Agriculture (DA) to fast-track the importation of 64,050 metric tons (MT) of refined sugar through the minimum access volume (MAV) mechanism to further “stabilize” sugar prices that have remained elevated.

In a memorandum order (MO) dated December 20, Senior Agriculture Undersecretary Domingo F. Panganiban said Marcos, who is concurrently the agriculture chief, is “concerned” about the “very high” inflation rate of sugar.

He noted that the annual inflation rate of sugars, confectionery and desserts in November reached 38 percent.

“Concerned about this very high inflation rate, President Ferdinand R. Marcos Jr., Secretary of the Department of Agriculture, has ordered the Department to take action to stabilize sugar prices,” Panganiban said in MO 77 addressed to Jocelyn A. Salvador, the OIC Executive Director of the MAV Secretariat.

Panganiban told Salvador to “immediately” convene the MAV Advisory Council (MAV-AC) and “expedite” the importation of the additional supply of refined sugar.

The MAV-AC is a body of 10 private sector representatives tasked to advise the MAV Management Committee (MMC) on all matters concerning MAVS such as allocation of quotas.

However, any recommendations made by the MAV-AC can be approved or overturned by the MMC, an inter-agency body chaired by the agriculture secretary.

Marcos’ directives came on the heels of the arrival of the 150,000 metric tons of sugar under the Sugar Regulatory Administration’s (SRA) import program.

MAV-AC meeting

THE Businessmirror learned that the MAV-AC convened on December 21 but it failed to arrive at a final decision or recommendation on the matter.

MAV-AC members, who requested anonymity, told the Businessmirror that they might convene again since the representative of the sugar millers sector would present its position paper about the proposed importation program.

The members of the MAV-AC come from the hog sector, poultry sector, grains sector, sugar sector, other MAV products sector, nonmeat processing sector, meat processing sector, commercial food service sectors, consumers sector and the National Agriculture Fishery Councils. The MAV-AC is chaired by an agriculture official with the rank of at least assistant secretary.

MAV-AC members said they were “surprised” that they were asked to convene and discuss the proposed sugar importation since all matters related to sugar, including the commodity’s MAV, are governed by the SRA.

The members noted that it has been the MAV-AC’S practice not to tackle any sugar importation programs, be it through MAV or outside MAV, given the SRA’S jurisdiction over the matter. Sugar imports are regulated by the SRA through the issuance of import licensing permits.

Sugar imports within the MAV are levied with a 50-percent tariff while shipments outside MAV are slapped with a 65-percent tariff.

However, sugar imports from Asean member-states are slapped a 5-percent tariff. The Philippines sources over 95 percent of its imported sugar from Thailand, an Asean member-state.

‘Disastrous’

THE United Sugar Producers Federation of the Philippines (UNIFED) on Wednesday expressed its opposition to the proposed import program, saying it would be “disastrous” to the local sugar industry, as sugarcane harvest has entered the peak season.

“We are at the peak of harvest and we have abundant stocks of raw and refined sugar. As such we see no need to import sugar at this time,” UNIFED President Manuel Lamata said.

“We are appealing to President Ferdinand Marcos Jr. to halt this importation of refined sugar through the minimum access volume mechanism until the results of a post-assessment of sugar stocks after the end of the milling season [is] conducted.”

Lamata pointed out that they are not against any sugar importation as long as it is “properly timed.”

“Millgate prices of sugar have gone down and if this further goes down with the entry of imported sugar, the sugar farmers will be facing a double whammy.”

Lamata claimed that high retail prices of sugar is not due to the lack of supply but is more of a retail trade issue.

For Philippine Chamber of Agriculture and Food Inc. (PCAFI) President Danilo V. Fausto, the decision of Marcos to approve a new round of refined sugar importation is “necessary” to temper high sugar prices.

“We need it to bring down the price of sugar. It is necessary. Like we told the President, if it is really necessary to bridge the supply, then let’s import as long as we import what is only needed,” Fausto said. “Hopefully [the additional stocks] would bring down the price.”

Latest SRA data showed that raw sugar production as of December 11 rose by 24 percent on an annual basis to 662,471 MT, bringing total supply to nearly 800,000 MT since the start of the current crop year.

SR A data showed that the current physical sugar inventory nationwide is at 237,737.4 MT, about 7 percent lower than last year’s 254,783.36 MT.

Meanwhile, the production of refined sugar went up by 36.36 percent an annual basis.

Total refined sugar production as of December 11 reached 248,024.10 MT while total physical refined sugar stocks, including earlier imports, stood at 203,704.8 MT. The current refined sugar inventory of the country is 56.66 percent higher than last year’s 130,032.75 MT.

The average retail price of raw sugar in Metro Manila markets is at P86.32 per kilogram while refined sugar averaged P100.10 per kg.