"Our agriculture officials have to respond to this open letter that raises crucial issues on sugar."
"Our agriculture officials have to respond to this open letter that raises crucial issues on sugar."
Sugar is the only exportable Philippine agricultural commodity that is subject to a regulation governing the exportable value. There is a good reason for this; it has to do with Philippine-US trade. This country enjoys an annual higher-than-world-market price quota in the US sugar market. The government, anxious that it might be withdrawn, wants to ensure that the quota is always entirely filled.
For the current Philippine sugar-crop year, which began on September 1, 2020, the Sugar Regulatory Administration (SRA) regulation is Sugar Order No. 1. In two recent news open letters – the first dates August 21 and the second dated September 14 – the chairman of one of the leading sugar producers in this country, Antonio Steven Chan, questioned SRA's computation concept and computation of domestic sugar consumption. Mr. Chan's open letters were addressed to William Dar, the head of the Department of Agriculture, which oversees SRA. Steven Chan says that he resorted to writing open letters to Secretary Dar because he has received no response either from him or SRA's director, Hermenigildo Serafica, to the issue he raised in the letters.
Mr. Chan argues that the computation of this country's sugar consumption during the 2020-2021 crop year is erroneous. He offered a number of facts in support of his argument that SRA was wrong in allocation 7 percent of total CY 2020-2021 production, which SRA has estimated to be 2.190 million metric tons (MT) and believing that there will be a surplus-available-for-export of 230,000 MT.
One fact offered by Mr. Chan was that under present law, sugar can be allocated for export only if there is a surplus, i.e., a volume in excess of domestic consumption.
Another fact offered by Chan is support of his argument was that the average annual domestic consumption of sugar during the last four years was way above SRA's 2.190-million-ton estimate of production.
Mr. Chan further said that internationally accepted standards in determining total domestic consumption of sugar includes imported sugar, i.e., not limited to “withdrawals” of domestically produced sugar.
Mr. Chan also said that the actual average annual domestic consumption during the last five years was close to 2.5 million MT.
“Data published by the Department of Agriculture of the United States, the GAIN information network, Sugar Asia and several sugar journals relied upon all over the world….point to the fact that, conservatively, Philippine total consumption is about 2.35 million MT or higher,” he asserted.
To drive the point out, the sugar industry mandate stated that nowhere in the world are “withdrawals” considered the bases for determining a country's total sugar consumption.
Finally, Mr. Chan noted that the Sugar Regulatory Board has yet to disclose (1) the CY 2019-2020 ending balance of the raw and refined sugar stock and (2) the estimated drop in total consumption mentioned by Mr. Serafica in a September written statement, which figures are indispensable in the determination of the existence of an exportable surplus.
Chan has raised with the Secretary of Agriculture and the SRA Director an issue regarding the domestic sugar equation during the present crop year. He has not received a response from either gentleman. Mr. Chan merits a response not only because he heads one of this country's largest sugar producers, but more importantly, because the issue he has raised will determine whether there will be domestically produced sugar sufficient for this country's needs until August 31, 2021.
