Just ask these fifty-something entrepreneurs: Zosimo and Nelson who know the dirty ice cream business like the back of their palms. But an essential ingredient—refined sugar—has brought bittersweet success to their business.
That is where it hits the most: Zosimo said a kilo of sugar that before cost P60—a dollar and a dime—now hits their pockets with P95, or nearly $2.THERE’S Medelyn Collorado, a street seller of “banana-Q,” short for two to three pieces of Musa saba bananas queued on a stick. Collorado said she had to cut the amount of sugar she uses: before the bananas were caramelized; these days they’re just glazed.
The aftermath of Odette was evident: prices of raw and refined sugar started to increase nationwide, especially in Metro Manila. Odette’s impact prompted officials to slash the total sugar production estimate for crop year 2021-2022 to 2.072 million metric tons from 2.099 MMT pre-milling crop estimate.
In February, the SRA issued Sugar Order 3 that authorized the importation of 200,000-MT refined sugar for industrial users, with half of the volume being bottlers’ grade . No one expected that the worse was about to happen after the issuance of SO 3.HOWEVER, sugar producers sought to stop SO 3 through the powers of the court, which issued two temporary restraining orders and a writ of preliminary of injunction.
However, the new sugar import program did not fly as the SRA resumed the implementation of SO 3 in May after it received a legal opinion from the Office of the Government Corporate Counsel that SO 3 could still be implemented in other regions except Region VI, where the writ of injunction was issued.
The reason is simple, Tolentino says: the sugar industry has been “administratively” controlled to “protect” local growers even to the “detriment” of anybody who consumes sugar, both ordinary Filipino consumers and food manufacturers. “If we are consistent with the idea of having people with competitively priced food and we are committed to the growth of the manufacturing sector, then we should liberalize the sugar industry,” he added.SUCH insights from Tolentino fail to assuage people like Danilo V. Fausto, president of the Philippine Chamber of Agriculture and Food Inc. .
Roehlano M. Briones, senior research fellow at the Philippine Institute for Development Studies, said he was surprised when he found out that the country’s refined sugar is now the second most-expensive sweetener in the world next to Oman. Briones said Oman is a country that imports virtually all its sugar supply.
In 2019, the National Economic and Development Authority commissioned Brain Trust Inc. to conduct an assessment on the country’s sugar industry. At that time, talks and plans of sugar liberalization were at their height. The study estimated that liberalizing the industry would slash the profits of sugarcane farmers and millers by 57 percent while “consumers gain in welfare” would increase by 65 percent.THE liberalization of the industry would result in a “society gain” of about P7 billion to P9 billion every year, according to the study.
Nonetheless, the study gavee recommendations to improve the sugar industry. These include the phasing out of the segmentation of the sugar market allowing for a unified quedan or warehouse system. Other recommendations were for the establishment of a tripartite price management system to curb monopsony and incentivizing investments in state-of-the-art milling technologies.“I think the solution for the sugar industry right now is to accept the tariffication formula,” he told the BusinessMirror.
Lanzona noted that the liberalization of the sugar industry shouldn’t be patterned, however, after the rice trade liberalization law since the two commodities have different value chain structures. For example, there are a lot of small-scale farmers in the rice sector while players in the sugar industry are “large firms” that have “invested a lot of capital” for production, he explained.
“If you import raw sugar, my estimates are that they would be just 6 percent cheaper because of tariffs and handling costs,” he said. “In this particular case, there is government nonfeasance. So, we should try to solve that first before doing something that would hurt local industry,” he added.