In a letter to Trade Secretary Peter Favila, the Confederation of Sugar Producers Associations (Confed) said allowing beverage firms to import sugar would flood the market and cause sugar prices to plunge.
The country’s biggest group of sugar farmers was reacting to Favila’s earlier statement that he would support a proposal from Alfredo Yao, chairman of Zesto Corp., to import sugar directly.
Confed national president Reynaldo Bantug said the country has enough stock of sugar to last beyond the end of the milling season.
"Our sugar stock balance as of Feb. 19 stands at 801,216 metric tons broken down into 642,494 tons of raw sugar and 158,722 tons refined sugar. These inventories are normal considering that we are still at the peak milling season," he said.
He explained that the current prices of sugar in the domestic market are driven by two primary factors: First, the world market prices of sugar which could be attributed primarily to the shift of many sugar producing countries to ethanol, the devastating hurricanes that hit the sugarcane fields of Louisiana and Florida in the US, and the drought that affected production in Thailand and Australia; and second, the consequential entry of speculation in the domestic sugar trading system attributable to the first factor.
"These two factors should not be attributed to the manipulation of the sugar industry since these are free market forces operating within the system and should be left to continue operating on its own, Bantug said.
He pointed out that the current levels of sugar prices are justified as production costs have also gone up drastically.
He explained that increases in world oil prices have driven the cost of fertilizers to unprecedented highs, along with the increases in the cost of transport, hauling and even spare parts for trucks and tractors.