"I hope it is possible to have a purposeful dialogue with SRA."
"I hope it is possible to have a purposeful dialogue with SRA."
The Philippine Sugar Millers Association (PSMA), whose members comprise the majority of the board of the Philippine sugar industry’s regular, Sugar Regulatory Authority (SRA), appears to be collaborating with the SRA in peddling to the Filipino people SRA’s we-will-have-an-exportable-surplus story.
Last month, PSMA informed the nation that: (1) Sugarcane milled was around 20 percent higher year-on-year (YOY) as of January 17, (2) There was a 20.2-percent increase in harvested sugarcane as of the aforesaid data, (3) There has been an increase in sugarcane production due to an increase in planted area, (4) This country has an “ample supply” of sugar to meet an increase in demand resulting from the reopening of the economy, (5) Prices have been stable because of the “sufficient stocks”, (6) this country’s raw sugar production in crop year (CY) 2020-2021 is projected to hit a “four-year high”, i.e., 2.19 million metric tons (MMT).
Reading on the back of PSMA’s rosy presentation of the Philippine sugar industry’s situation, SRA’s Administration made this grand statement: “We forecast that we will have excess sugar in this crop-year, 2020-2021, which will need to be exported.” The current crop year is only halfway through, yet the SRA is already confidently talking about excess sugar and exports. If that is not a case of conditioning of the Filipino people’s minds, what is?
Why is the declaration of the existence of “excess sugar” and the making allocation of for-export sugar in SRA’s Sugar Order No. 1 so important to the Administrator and his SRA-board colleagues? The answer is not hard to find: it is the difference between the price of sugar in the premium domestic market and its price in the dumping-ground world market. The difference is substantial; there is a lot of money to be made by playing the differential. And who allocates the amount of sugar (1) for the domestic market and (2) for the world market? SRA, of course.
Those who are familiar with the mechanics of sugar trading know how the game is played. Keep domestically produced sugar for the premium domestic market and use cheaper imported sugar as the “excess sugar” to be exported to the world market. There is a lot of money to be made by such substitution.
And who suffers the most in that fast shuffle? The small planters, especially the agrarian reform beneficiaries who don’t receive the best possible prices for their sugarcane.
Having a deep interest, as I do, in the Philippine sugar industry – being an economist and a native of Sugarland – I wish to pose two questions to the leadership of SRA. (1) Do your figures for total national consumption – not “withdrawals”, which is what you choose to call it – include imports? (2) Has total domestic production (i.e., minus imports) really exceeded total consumption during the last four crop years?
With those answers, it will be possible to have a purposeful dialogue with SRA.