The declaration of no more sugar importation until the next harvest failed to arrest the drop in mill gate sugar prices, the Sugar Council and the National Congress of Unions in the Sugar Industry (Nacusip) said.

“If the ‘no further importation’ pronouncement aims to arrest the drop in mill gate sugar prices over the past weeks, the fundamentals to firm up prices are woefully absent,” the two sugar groups said in a joint statement.

The Sugar Council and Nacusip emphasized that the recent declaration by the Department of Agriculture (DA) and Sugar Regulatory Administration (SRA) is “a case of closing the stable doors after the horse has bolted.”

“It takes no stretch of the imagination to connect the drops in domestic demand and sugar prices to the entry of imported sugar, aside from sugar substitutes,” their statement said.

Earlier, DA Secretary Francisco Tiu Laurel, Jr. said there is no immediate need for additional sugar imports until the end of the harvest next year, “as the domestic supply of both raw and refined sugar remains stable and sufficient to meet projected needs.”

“Given the current situation, I agree that a decision on sugar importation could be delayed until after May, when the current harvest season ends,” Laurel said in a statement posted on the DA website last week.

In its letter to Laurel, the Sugar Council recommended no importation under Sugar Order No. 5 because existing sugar stocks were projected to last up to December 2024.

Meanwhile, the Sugar Council and Nacusip said the DA’s statement was apparently meant to allay fears that more importation would cause a further drop in sugar prices.

However, it failed to explain why sugar prices have steadily dropped over the past few weeks.

“Sugar prices have dropped from P2,980.88 per bag for October 20, to P2,815.99 per bag for November 10. That’s a price drop of P164.89 per bag in only three weeks,” the sugar groups said.

They also pointed out that in other mills, sugar prices dropped to much lower rates as early as November 3.

“An apparent decrease in demand has consequently caused the steady drop in prices,” the Sugar Council and Nacusip said.

The groups stressed that SRA should address this concern, as they are worried over the current oversupply of imported and locally produced sugar in the market.

They cited SRA’s supply-demand report dated October 20, where out of 240,000 metric tons (MT) of imported refined sugar authorized by Sugar Order No. 5 signed on August 8, only 135,833.20 MT have entered the market.

There is still a balance of 104,167 MT, they said, as mill gate prices are trending down.

The sugar order recommends eligible importers to bring their volumes in, classified as C-sugar, by September 15 of this year.

“Does this mean that the balance volume will remain classified as C-sugar until after next year because of the ‘no importation’ pronouncement of the DA?” the statement said.

The same SRA report revealed that withdrawals of raw sugar dropped by 18.38 percent, while refined sugar withdrawals dropped by 20.18 percent, compared to the same period last crop year.

“What is equally worrisome is the fact that only 1,314 MT of refined sugar was produced by refineries. Compare that to 58,990 MT in the same period last year. That’s a drop of over 97 percent,” they said.

“It should be noted that a considerable amount of locally produced raw sugar is withdrawn for refining, but if there is more than enough supply of imported refined sugar, it makes no business sense for refineries to withdraw raw sugar. Hence, demand for it goes down and mill gate prices drop,” they added.

The sugar groups emphasized that, aside from the increase in supply due to importation and the drop in demand, the sugar industry also has to contend with the widespread use of artificial sweeteners in the beverage industry, particularly sucralose, aspartame and acesulfame potassium.

Scientific studies, they cited, show that sucralose is 600 times sweeter than sugar, while aspartame and acesulfame potassium are 200 times sweeter than sugar.

The Sugar Council and Nacusip asked for the DA’s help in providing data on the impact of these artificial sweeteners on the consumption of locally produced sugar, particularly the volume of local sugar displaced by the use of these products.

The total importation of the three sweeteners increased from 950,989 kilos in 2022 to 1,100,783 kilos in 2023.

“Aside from SRA increasing the import clearance fees for high fructose corn syrup, we have yet to receive data we requested from the DA and SRA,” the Sugar Council and Nacusip said./WDJ