Negros producers want sugar destined for the United States to be reclassified for local sale

To help alleviate a burgeoning sugar crisis, some large growers on the island of Negros asked President Marcos to release for domestic sale their “homeless” sugar, or the stock the government had allocated to l export to the United States under a controversial and often criticized policy. like an outdated quota system.

Central Azucarera de Bais Inc. (CAB) and Central Azucarera de San Antonio Inc. (Casa) have a combined volume of 9,679 metric tons (MT) of exceptional Class A raw sugar that they have applied to the Sugar Regulatory Administration ( SRA) to reclassify into class B shares likely to be sold on the local market.

In a July 4 letter to Mr. Marcos, who simultaneously assumed the role of Agriculture Secretary, CAB and Casa sought the reversal of the SRA’s “unreasonable, arbitrary and discriminatory” denial of their reclassification request. sugar amid the sugar regulator’s own decision. admission of a “severe” shortage and that the country could run out of raw sugar supplies in August.

Disagree with the SRA

This part of the sugar stocks became homeless when the two companies decided to keep them while they “vigorously objected to the SRA’s pernicious and continuing practice of forcing growers to sell quedan sugar for the export, even though domestic prices were significantly higher”.

In the letter, a copy of which Inquirer obtained, the sugar companies cited a report from the United States Department of Agriculture’s Global Agricultural Information Network which noted that for the past three crop years, average domestic sugar consumption in the Philippines reached about 2.3 million MT against an average production volume of only 2 million MT.

“The SRA only allocated export sugar to resort to import (through its so-called Expert Replenishment Scheme) because said export depleted the already insufficient sugar supply” , the sugar companies said.

CAB and Casa recalled that prior to the tenure of SRA Hermenegildo Serafica and former Agriculture Secretary William Dar, the reclassification of quedan sugar was a tool used by regulators to address sugar shortages, arguing that conversion “should take precedence over import”. There have been instances where the supply of raw sugar previously intended for export to the US market has been recalled and reclassified to meet local sugar shortages.

A major overhaul is needed

Overall, Negros-based companies have urged a rethink of the country’s compulsory sugar export system, citing a 2021 policy working paper released by the National Economic Development Authority (Neda) itself, which stated that “the quedans allowance for sugar exports to the United States has lost its usefulness and introduces undesirable distortions in the market.”

Neda’s policy paper, “An Assessment of Reform Directions for the Philippines Sugar Industry,” said such an allocation seemed “incongruous” in a situation where domestic needs already matched or exceeded domestic production.

For its part, the SRA justifies the maintenance of the allocation of quedan by the desirability of continued access to the preferential American sugar market.

Read more

Don’t miss the latest news and information.

To subscribe to MORE APPLICANT to access The Philippine Daily Inquirer and over 70 titles, share up to 5 gadgets, listen to news, download as early as 4am and share articles on social media. Call 896 6000.

For comments, complaints or inquiries, Contact us.

Rachel J. Bradford