Stop Sugar Exports To U.S., Gov’t Urged

Published on February 4, 2010

February 4, 2010

Research group IBON Foundation today told government to stop the exportation of sugar to the US to ensure domestic supply and protect the country’s food security.

The group made the appeal amid claims by the Department of Trade and Industry (DTI) that a “sugar shortage” looms as supermarkets may pull out sugar products in the coming days due to rising prices. A major El Niño episode this year also threatens domestic sugar production, according to the DTI.

To stabilize domestic prices, government resorted to the duty-free importation of 150,000 metric tons (MT) of sugar.

But the group said that while the country is scrambling to import sugar from the world market, the Philippines is also set to export about 158,906 MT of sugar to the US under a quota system and to take advantage of skyrocketing global prices brought about by the reported reduced sugar production in India and Brazil.

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Philippine sugar exports go to the US market under its Tariff Rate Quota (TRQ) system. This system sets the specified volume of raw cane sugar that the US will allow to enter its market at a relatively low tariff as part of its commitment under the World Trade Organization (WTO) Uruguay Round agreements.

According to IBON, if government is warning that there will be a shortfall in supply, continuing the fulfillment of the country’s sugar quota commitments to the US contradicts the national interest.

IBON hits government’s move to import sugar, saying that it only serves to mitigate the impact on the local supply while traders scamper to export and take advantage of high global prices. Moreover, the move to import failed to benefit local consumers in terms of lower prices because of the existing sugar cartel. IBON also criticized the seeming collusion among government, exporters
and importers to hype the supposed shortage so that the high sugar price will be sustained even after the reported troubles in the world market.

The group said that the best protection against price and supply speculation prevailing in the industry today is to guarantee the availability of sugar in the market.

Suspending sugar exports is justified by the country’s food security interests. During the height of the global rice crisis in 2008, major rice exporters such as Thailand and India suspended exports. The Sugar Regulatory Administration (SRA) simply needs to fulfill its mandate of regulating sugar export to ensure domestic supply.

IBON Foundation Inc.