Imported pre-mixes alarm sugar producers

BACOLOD CITY - Sugar industry leaders said rising importation of premixes with high sugar content is eating into the industrial market for refined sugar.

They said this is one of the reasons mill-gate sugar price has gone done from P2,400 to P2,200 per 50-kilo bag.

Raymond Montinola, chairman of the Confederation of Sugar Producers Negros-Panay, said the sugar industry has lost an estimated P1 billion because of the 25,000 tons of premix sugar imported by industrial users.

The past weeks, Montinola said, they noticed a slowdown in the purchases of domestic sugar, especially by industrial users, and they found out that the cause was the surge in the entry of premixes.

Premixes are food preparations that contain sugar with added flavoring and or coloring. These are allowed to enter either at reduced or zero tariff, unlike imported sugar that is subject to a 38 percent tariff.

"We need to arrest the initial attempt of these industrial users to flood the market with imported premix sugar as this will destabilize sugar trading and prices," Montinola said.

Enrique Rojas, president of the National Federation of Sugarcane Planters Inc., also warned the public of the health hazards of artificial sweeteners or sugar substitutes that reportedly have been flooding the country.

"Sugar withdrawals since the start of the milling in September 2010 have dropped more than 50 percent as of December 12, compared to the same period last year. This indicates that food and beverage manufacturers have been using sugar substitutes, sugar premixes or even synthetic artificial sweeteners such as magic sugar," Rojas said.

As of Dec. 12, 2009 sugar withdrawals stood at 604,001 metric tons, while as of Dec. 12, 2010 withdrawals dropped to 259,835 metric tons based on the Sugar Regulatory Administration’s Sugar Production Bulletin, he said.

For refined sugar, withdrawals as of Dec. 12, 2010 were pegged at 156,329 metric tons, compared to 330,555 metric tons for the same period in crop year 2009-2010. The volume of refined sugar withdrawn from the refineries also dropped by more than 50 percent, Rojas added.

"To save on their production cost, some unscrupulous companies may have resorted to using cheaper sugar substitutes and artificial sweeteners in their food and beverage products, at the expense of the health of the public," said Rojas.

Officials of Confed headed by Montinola met Wednesday with Sugar Regulatory Administrator Gina Martin and discussed measures on how to address the importation of premix sugar by industrial users.

Martin said she is preparing to issue an order to regulate the entry of foreign sugar in the guise of premixes.

"Per result of the initial study made by SRA, there is a need to issue a sugar order to properly regulate the entry of premixes," Martin said.

She said the SRA order will define what can be classified as premixes.

Montinola said the SRA mandate includes issuance of clearance for sugar premix commodities that enter the country.

If laboratory analysis shows that premix sugar brought in has more than 65 percent sucrose content, the SRA has the power to monitor and regulate the premix commodity just like sugar, he said.

"There is an accepted concept by the World Customs Organization that any sweetened substance containing more than 65 percent sugar is sugar and should be subjected to tariff," Montinola said.

There was a case of a premix containing 99.9 percent sugar that recently entered the country. This commodity was plain and simple sugar that should be been slapped the 38 percent tariff, Montinola said.

Martin said the recent drop in the millgate price of sugar can also be attributed to the fact the milling season is at its peak.

She also said softdrink firms, which consume 60 percent of sugar output, may have slowed down their purchases because of slower sales after the dry season.

source: malaya