Another increase in RP share of US sugar quota

The best Christmas news for domestic sugar producers is the United States’ call for additional 272,135 metric tons of raw sugar imports, with the Philippines getting a share of 37,037 metric tons.

The official notification from the USDA was received yesterday by Sugar Administrator James Ledesma, who immediately relayed it to the officials of the Sugar Alliance of the Philippines.

The Philippines, in line with the traditional sharing of TRQ imports, got the third highest allocation.

The Dominican Republic got the biggest share with 48,285 metric tons, followed by Brazil with 39,781 metric tons and the Philippines with 37,037 metric tons.

The SRA has also asked sugar traders to ship early to the US their last quarter shipments. This will allow the decongestion of stock balances of "A" sugar.

Actually, the Philippines had long expected that the US would call for additional raw sugar imports because of the expected shortage caused by three major hurricanes that devastated the Gulf states of Louisiana, Mississippi and Florida.

The first hike was issued before Katrina. Later, with refineries and mills in Florida devasted by Katrina, fears were aired about an impending shortage and subsequently, a second call for more imports. This became inevitable when hurricane Rita wreaked more havoc on Louisiana’s sugarcane plantations.

Reports from the US indicated that Rita drove seawater as far as 15 miles inland, submerging the ripening sugarcane crops under seawater. This became problematic as draining the water was not enough. There was also a need to desalinate the ruined fields which could no longer be salvaged.

As the inventory of losses mounted, it was learned that a big refinery in Louisiana suffered extensive damage to its equipment and that may need to be rehabilitated or new equipment has to be purchased. Besides, railroad trucks and roads also went under water and homes of sugar mill workers were also swamped.

Sugar beet producers also failed to meet the request for additional quotas for their sugar. Thus, it became impossible for the US not to ask for additional raw sugar from its traditional suppliers in addition to the 35,000 metric tons already allocated to the Philippines in the first call.

This prompted the sugar board, headed by Agriculture Secretary Domingo Panganiban, to approve the increase of the allocation of "A" sugar from seven to 10 percent of the projected local production.

SRA also assigned 20 percent more of the expected production as "C" or reserved sugar.

Ledesma disclosed that he may issue an early grant for "B" sugar (domestic sugar) to be swapped early for "A" sugar so the Philippines can comply with its commitment to the US.

The announcement for the allocation came just as US trade representative Rob Portman was preparing to lead the US delegation to the World Trade Organization ministerial meeting in Hong Kong.

Confederation of Sugar Producers Association Inc. national president Reynaldo Bantug admitted that the country is on razor’s edge with the present additional call for more raw sugar imports by the US.

Bad weather plus the closure of the Central Azucarera de Tarlac is expected to affect sugar production and depress it further. Besides, as pointed out by George Zubiri of Bukidnon Planters, local producers have shifted back to corn because of increased prices of the cereal as well as the temporary drop in millgate sugar prices. Thus, it is anticipated that Bukidnon sugar production may decrease by as much as 30 percent.

However, such losses may also be nullified by the perceived slower withdrawal of sugar, an indication of the economic crisis, although millgate prices have risen back to more than P900 per 50-kilogram bag.

Millgate sugar prices rose to as much as P940.41 in the Hawaiian Philippines Company mill district. It reached P930 at the Lolez Sugar Corp., P930 at the Bukidnon Sugar Company, and beyond the P900 level in other companies.

The announcement of the additional sugar quota is expected to boost millgate prices of sugar as sugar traders compete fiercely to be able to grab their share of the sugar shipment to the US.

At least for the Christmas season it would mean a respite for producers who were hit hard by the rising cost of chemical fertilizers. Now producers can meet the additional outflow of money for the 13th month pay and Christmas bonuses of their workers.

Halleluiah.

Task Force Sugarlandia

Another welcome boost to sugar producers came from President Arroyo through the issuance of Memorandum 199 setting up Task Force Sugarlandia.

The task force is expected to promote the growth of the global competitiveness of the local sugar industry and strengthen the promise of biomass energy that will hopefully address the current oil crisis and help reduce the country’s dependence on imported fuel.

The task force is mandated to support, enhance and strengthen the operations and programs relative to the development of the sugar industry and "to fast-track the government’s ethanol program."

It will be a multiple-agency body with the Department of Agrarian Reform (DAR) as chairman. The other members will be representatives of the Departments of Energy, Agriculture, Interior and Local Government, Science and Technology, and Justice, the National Development Corp. and the SRA.

It will have three representatives, one each from the sugar farmers, sugar farm workers, and the landowners.

The task force will conduct and complete a study identifying specific problems in the implementation of the Comprehensive Agrarian Reform Program (CARP) which directly affects the development of the sugar industry and to conduct consultations in areas to be identified by the task force.

The task force can also recommend modifications or amendments to existing laws, regulations and procedures to remove impediments to the immediate and efficient implementation of the programs and activities relative to CARP.

That, hopefully, will help rationalize the debatable questions involving the implementation of the bioethanol program of the government and the quest by the Philippines to attain energy security in the face of escalating oil prices.

ADDENDA: Panay or Iloilo no longer faces a blackout during the Christmas holidays. The Energy Regulatory Commission (ERC) has given the sole power distributor in Panay probational authority to increase its rate. The Panay Electric Company (PECO) was given the authority to charge an additional P2.30 to its current generation charge. This will enable PECO to collect P6 generation charge per kilowatt hour. The power firm earlier threatened to cease operations because of the difficulty of paying the Panay Power Corp. (PPC). Energy Secretary Raphael Lotilla admitted that the ERC’s decision is not a guarantee that there would be no more power interruptions in Iloilo City and the province. Iloilo City Mayor Jerry Treñas admitted that the power problem is real and stressed that "we are preparing for the worst and hoping for the best." PPC, Treñas added, has been incurring as much as P120 million in losses per month since September. To date, PPC losses have already amounted to no less than P360 million… The National Bureau of Investigation (NBI) is mulling the possibility of filing charges against a doctor and a non-government organization for the death of a Bago City woman, a victim of an alleged botched tubal ligation operation. NBI Bacolod chief Philip Pecache said if they can present proof, charges will be filed against Dr. Aileen Apurillo and the Marie Stopes Group. The victim, Perceveranda Sioco, of Barangay Sagasa, Bago City, died from septic shock and peritonitis at the Corazon Locsin Montelibano Memorial Regional Hospital after she had undergone tubal ligation at the Bago District Hospital on Nov. 25. She was transferred to the CLMMRH and died on Nov. 28. That incident prompted Bago City Mayor Janet Torres to ban further activities of Marie Stopes in the city. Last April 29, Negros Occidental Gov. Joseph Marañon issued a memorandum to all city and municipal mayors that Population Services Pilipinas Inc. (Marie Stopes), a non-government organization based in Cebu that performs voluntary female surgical sterilization services, is not accredited. Pecache said he is trying to determine whether Mayor Torres has received a copy of the memorandum. The problem is that reactions like this come in only after a tragedy.