‘Sugar imports not the key'

“Sugar importation is not the solution for lower retail sugar prices because the landed cost of imported sugar will be higher than our present prices,” National Federation of Sugar Planters president Enrique Rojas said in an NFSP press release.

Rojas was reacting to the proposal of Trade and Industry Secretary Peter Favila to import sugar, purportedly to curb the alleged high sugar prices in the country, the press release said.

“There is no shortage of domestic supply of sugar. Domestic sugar prices are just responding to the stimulus of world sugar supply and demand dynamics. Our present domestic sugar prices are just normal pricing reactions to market forces,” Rojas said in the press release.

He said raw sugar for March delivery traded yesterday at $22.11 per pound in New York 's Intercontinental Exchange.

If the ocean freight, insurance and other related expenses are included, it will translate at present exchange rate of P47.19 to $1 to almost P1,300 per 50-kilo bag, excluding 38 percent tariff.

With the imposition of the 38 percent tariff, the landed cost of imported raw sugar will be almost P1,800 per bag.

The expenses for letter of credit, bank charges, import fees, association fees, SRA liens and moving cost from ship to warehouse to retailer will add another P150 per bag.

Profit margins for importer, wholesaler and retailer amount to about P200 per bag, the NFSP press release said.

Thus, total cost of imported raw sugar will be around P2,150 per bag or P43 per kilo.

If the imported raw sugar is refined, the additional tolling fee and refining weight loss factor will translate to a refined sugar retail price of no less than P48 per kilo, Rojas said in the press release.

“International commodities researchers and analysts estimate that world sugar supply for this crop year is at a deficit of 6 million metric tons due to damage to crops in Brazil and India . This global shortage is driving world sugar prices higher and higher and that is something beyond our control,” he said.

While other countries are experiencing sugar shortage, we assure everybody that the Philippine sugar industry has enough sugar to supply our domestic needs and we even have some extra production to export to the United States . It might be that some sectors in the distribution chain are withholding the supply to create an artificial shortage and thus jack up the prices, Rojas also said.

He said that the industry has allocated 6 percent of production for strategic reserve or C1 sugar, either for export to the US or for domestic consumption.

The priority is domestic consumption, he stressed, adding that if necessary, this strategic reserve can be immediately released to ease the perceived shortage in the domestic supply.

He reiterated that sugar importation is not the solution because imported sugar will be more expensive than present domestic price levels.

He asked the public for understanding that the present sugar prices are not caused by the producers but are the result of market forces which are also influenced by world sugar prices.

For the past several years, we have suffered from low prices and high input costs. It is only now that we are slowly recovering the losses we have incurred in the past years. We hope that government will also understand that the sugar producers, almost 90 percent of which are small farmers cultivating less than 10 hectares, are also entitled to a fair return on their investments,” Rojas said in the press release.

source: visayandailystar