No guarantee in sugar importation

The Unyon ng mga Manggagawa sa Agrikultura (UMA) today stated that importation of sugar to the country is not a guarantee to the lowering of its retail price in the local market.

This contrasts with what the Sugar Regulatory Administration (SRA) is saying when it allowed the importation of 200,000 metric tons (MT) of sugar to the country this June, supposedly to lower its retail price.

According to John Milton (Butch) Lozande, secretary general of UMA, the Philippines has been importing sugar ever since. In 2016 alone, the country imported 373,138 MT of high fructose corn syrup (HFCS) mainly from China and South Korea and 246,111 MT of refined sugar from Thailand.

HFCS imports went down to 283,000 MT last year according to SRA administrator Hermenegildo Serafica. Refined sugar imports from Thailand also went down to 59,324 tons in 2017.

HFCS is a sugar substitute used mainly by soft drink manufacturers like Coca Cola. But due to the Tax Reform for Acceleration and Inclusion (TRAIN) law which imposed a tax of P12 per liter on HFCS sweetened beverages and P6 on sugar sweetened ones, said soft drink makers shifted to sugar again this year.

But even if the Philippines imported a total of 619,249 metric tons of sugar and HFCS in 2016 and another 342,324 MT of the same in 2017, this did not cause the retail price of refined sugar to go down in the country’s retail market.

Even the US Department of Agriculture’s Global Agricultural Information Network (USDA GAIN) reported in its 2017 report that wholesale prices of raw and refined sugar in Metro Manila have dropped since 2015/16, but retail prices of raw and refined sugar have remained relatively stable and have not made a corresponding downward adjustment.

In its April 2018 the GAIN reported that while the wholesale prices of raw and refined sugar in Metro Manila have dropped since 2016/17, which recovered in February 2018, the retail prices of raw and refined sugar have remained more stable, declining only slightly.

To be more concrete, the highest wholesale price of refined sugar in Metro Manila in 2015/16 was in February 2016 at P2,600 per 50kg. bag at a retail cost of P56 per kilo. The retail price remained the same up to March 2017 when the wholesale price was reduced to P2100 per 50kg. bag.

The retail price of sugar even increased to a maximum of P56.67 in December 2016 when the wholesale price was P2,305.47. The retail price was lowest in October 2017 at P54.76 per kilo while the wholesale price was only P2016.17 per 50kg.

So, what’s causing the high prices of sugar in the retail market? The government is saying that this is due to the selling of farmers and planters import rights to traders at a cost of P500 per bag or P10 per kilo. Dept. of Finance (DOF) Sec. Carlos Dominguez III said that the traders cannot lower the landed cost of sugar because of this.

But according to the data provided by S&P Global Platts, the landed price of refined sugar in the Philippines from Thailand is around $367.87/ mt. This is just equivalent to P20,254.0/MT or at P1,012.7 per 50kg. bag. This is way below the recorded P2,200 wholesale price of the same weight of sugar recorded in March 2018.

The sugar retail market prices in the country are being manipulated and the government should investigate who are doing this. To protect the consumers, the government should also put a price cap on sugar in the retail market.

Importation of sugar is not the cure for lowering the retail price of sugar. Instead the government should assist in improving the sugar industry. This includes scrapping the 5% lowering of the tariffs of imported sugar implemented in 2015 and ensuring the labor rights of the more than 700,000 sugar workers which ironically were not included in the Sugar Industry Development Act (SIDA).

- Unyon ng mga Manggagawa sa Agrikultura