PHILIPPINES: SRA reviewing royalty process for sugar imports

Published: 07/11/2018, 11:13:23 PM

The Department of Agriculture (DA) said it will review the royalty system for sugar imports to ensure farmers receive their share, according to the Philippines' Business World newspaper.

Agriculture Secretary Emmanuel F. Piñol told reporters on Tuesday that some changes may be in the works to ensure that sugarcane farmers benefit from the importation process, as per cabinet discussions on Monday.

"SRA (Sugar Regulatory Administration) said that whatever is earned is divided among the farmers. However, who would know whether the declared royalty is really the royalty farmers receive?" he added.

Piñol said that the previous system involves the SRA allocating imported sugar for farmers and planters associations to sell to processors and bottlers.

"I made this clear during my meeting with the stakeholders: How sure are we that the royalty given to the farmers and planters associations really trickles down to the sugarcane farmers?" he said.

"By giving the allocation to planters and farmers' associations who sell these to traders and processors would mean a markup on the price of imported sugar which defeats the purpose of why we should import sugar, which is to bring down the cost."

Piñol also clarified that there is still enough sugar in the market and blamed speculators for rising prices despite a glut in world supply.

The SRA estimates that the prevailing retail price for raw sugar as of July 7 was PHP50 per kilo, with washed and refined sugar at PHP52 per kilo and 65 per kilo, respectively.

This is higher than the previous months' record where the prevailing retail prices for raw, washed and refined sugar were at PHP48 per kilo, PHP50 per kilo, and PHP60 per kilo, respectively.

Prevailing retail prices from a comparative period last year also posted slightly lower or maintained the same prices with raw and washed sugar being only sold at PHP45 per kilo and PHP48 per kilo, respectively. Refined sugar was priced at PHP53 per kilo.

However, Piñol said that the only sector facing a supply issue is the bottling industry, especially Coca-Cola FEMSA Philippines, Inc. as its suppliers allegedly redirected their sugar stocks to the commercial market.

"I told [the suppliers] in our last meeting to make sure that the volume imported with the intent to supply to the bottlers and processors must be delivered to the processors and the bottlers," he added.

"If you don't, the government still reserves the right and has the power to allow these bottlers to import directly," potentially exposing the traders to losses.