Farmers buck importation of sugar by NFA

Sugar farmers are opposing government’s plan to allow the National Food Authority (NFA) to import sugar next year at low tariffs.

The Confederation of Sugar Producers Association (Confed), the country’s biggest sugar farmers organization, said such a move undermines the local market with NFA operating on its own as a major trader, selling sugar to other traders even when prices are stable while underselling the market in order to move inventory.

Confed doubted NFA’s claim it is selling sugar to consumers at low prices, saying NFA prices are way below market prices and levels determined by the Department of Trade and Industry (DTI).

The NFA said Congress earlier incorporated in NFA’s budget proposal for 2001, the shipment under the minimum access volume (MAV) for sugar, some 54,000 metric tons.

"Congress included the MAV in our proposed Sugar Stabilization Fund (SSF), and usually, approval of the SSF also means an automatic approval of the MAV," noted an NFA official.

Agricultural commodities that are imported under the MAV are imposed very low tariffs. For sugar brought in under MAV, government levies a 50 percent tariff. Sugar imports outside of the MAV are imposed a higher tariff of 65 percent.

The source said the MAV which allows NFA to bring in sugar at low tariffs is meant to offset or minimize the trading agency’s losses incurred every time it has to buy raw sugar from domestic producers at a support price and sell this in turn at very low prices to satisfy consumers’ requirements.

The low-tariff sugar is auctioned by the NFA to sugar distributors and the proceeds are used to boost its procurement/subsidy operations for sugar, corn and palay.

However, Confed national president Bernard Trebol disputed NFA’s claims, saying, NFA has not been buying raw sugar from farmers at the support price.

"There are even indications NFA is even dumping its still huge sugar inventory accumulated last year into the local market at prices way below the government support price of P800 to P850 per bag without sufficient basis, causing farm prices to drop," Trebol added.

Confed said NFA was allowed to engage in buying and selling of sugar to establish a floor price to prevent traders from exploiting the market, and to do this only in times when prices of the commodity surge to unreasonable levels.

However, Confed said NFA is establishing a low price instead of maintaining market prices determined by the DTI and the Price Coordinating Council.

Congress directed the NFA last year to import sugar under the MAV to stave off a shortage and prevent domestic prices of sugar from skyrocketing.

In recent months, NFA imported 200,000 MT of sugar to meet local demand, this volume already includes this year’s 51,000 MT sugar MAV.