Traders, importers to buy local raw sugar at premium

To arrest falling sugar prices

MANILA, Philippines —  Sugar traders are keen on purchasing 300,000 metric tons of local raw sugar at a premium price in exchange for getting a priority allocation in future import programs of the government.

The industry intervention seeks to lift the prevailing mill-site prices of raw sugar that have fallen and remained below favorable levels for sugarcane planters, according to a draft Sugar Order (SO) obtained by The STAR.

The draft SO is currently being studied by the Sugar Regulatory Administration (SRA) board in consultation with industry stakeholders, sources familiar with the matter said.

The document stipulated that sugar traders and importers have “manifested” their intention to buy a “limited” volume of locally produced raw sugar “at a premium.”

The SRA, based on the document, deemed it “necessary” to implement “responsive” and “pre-emptive” measures to arrest falling raw sugar prices.

This measure, it noted, involves traders and importers purchasing raw sugar at a higher prevailing price in order “to qualify for a possible preference in the availment of allocation in the event of an importation program.”

“The intention of this Limited Volume Purchase of locally produced sugar is to uplift the farmgate prices of locally produced sugar to a better and stable level, while ensuring optimal retail prices,” the draft document read.

Sugar traders and importers that will participate in the procurement program “shall be given priority” in the next import program if the government decides to open one based on prevailing market conditions.

“The SRA categorically states that there is presently no program for sugar importation. As such, privileges that may be afforded to eligible participants under this Order shall apply to future import programs, if and when the need to import sugar arises,” the draft order read.

Reacting to the import provision of the draft SO, the Sugar Council urged the SRA to “declare” that it will not open an import program for the entire 2024.

“While the section says in part, ‘if and when the need for sugar importation arises…’ the question is begged – why even mention it if there is no intention to import?” the group said on Thursday.

The group also inquired on the status of the P5 billion sugar procurement program that SRA plans to implement together with the Philippine International Trading Corp.

The Sugar Council argued that the government should just stick and hasten its procurement plan and “reconsider” and “abandon” the program proposed under the draft SO.

“If any delay is being caused, it is being caused by the SRA which already has P5 billion to start the project. Where is the P5  billion, and where are the implementing guidelines?” it said.

SRA Administrator Pablo Luis Azcona told The STAR that the government’s own raw sugar procurement program is still on the table with the guidelines still being drafted.

Azcona said that sugar industry stakeholders were informed in a January meeting, which was attended by members of the Sugar Council, of the two procurement programs proposed by SRA.