The Confederation of Sugar Producers (CONFED) is supporting a resolution of Sen. Juan Miguel Zubiri urging the Department of Agriculture (DA) and the Sugar Regulatory Administration (SRA) to convert the tariff-rate quota (TRQ) sugar allocations to the United States for local industrial users.
CONFED in a statement said the conversion will help farmers deal with the marginal farmgate prices of sugar in the past three years.
Raymond Montinola, CONFED spokesperson, said Philippine sugar cannot compete with world prices.
“Most sugar-producing countries have quantitative restrictions in place to protect their local market; case in point Indonesia and Malaysia which produce less than their demand yet they keep a keen schedule of sugar imports to allow their sugar producers earn a profitable livelihood,” Montinola said.
TRQ allows countries to export specified quantities of a product to the US at a relatively low tariff, but subjects all imports of the product above a pre-determined threshold to a higher tariff.
The Philippines is among selected countries given an annual allocation of sugar export to the US market at a premium.
CONFED said only beverage companies should be allowed direct access to the sugar imports as they have preferred standard for their softdrink manufacture.
It said the scheme should be under the direct supervision of the SRA for transparency.
“Our local sugar industry right now needs the support of government … to ensure stable prices (of) our sugar. The SIDA (Sugarcane Industry Development Act) will definitely make the sugar industry efficient but it is still at an infantile stage. Given enough time and continued government support, our sugar industry will become competitive,” Montinola said.
Sugar consumption for the current crop year will be at 2.4 million MT against a projected production of 2.09 million MT.
If the country will still allocate 105,000 MT of sugar for US quota, local production that can be used for domestic consumption will be at 1.99 million MT and will force the country to import the 400,000 MT supply deficit.
It will thus be unwise to fulfill the US quota since local price per 50-kilogram bag of sugar averages at P1,500 while those shipped to America is only at P1,100 per bag.