Gov't eyes sugar imports, subsidy after price hikes

The Philippines, pressured to curb rising domestic sugar prices, may import at least 100,000 metric tons (MT) of raw sugar, subsidize duty and release reserve stocks to boost supplies, senior government officials said on Tuesday. The import volume is double the earlier estimate of up to 50,000 MT, and marks the first time the country is importing the sweetener since becoming self-sufficient and a net exporter in 2003. Manila plans to release 15,000 MT of reserve sugar to the domestic market as soon as possible to help rein in rising prices, Rafael L. Coscolluela, administrator of the Sugar Regulatory Administration (SRA), told Reuters in a phone interview. "We're going to propose that we program the imports later this year so that we can come up with a two-month buffer stock," Coscolluela said, adding that the target buffer was around 300,000 MT. "To meet the current tightness, we can release the C [reserve] sugar and import towards May or June," he said. Asked whether the volume of sugar imports would reach at least 100,000 MT, the official said: "It's possible, it could be around there." Both the plans for imports and the release of reserve stocks were drawn up in a meeting with local sugar millers and producers on Tuesday. The proposals were to be presented to the Cabinet at a meeting later in the day, he said. "We are inclined to support [releasing reserve sugar]. We are trying to help the government stabilize prices," said Archimedes B. Amarra, executive director of the Philippine Sugar Millers Association. But Roberto C. Amores, president of the Philippine Food Processors and Exporters Organization, Inc., said in a separate phone interview that the government should particularly ensure sugar for his sector. "If we buy in the open market, our cost will be 30-40 percent higher than our competitors," Amores said. "There is no sugar available [for food processors]... we are not competitive," he said. He noted that refined sugar for food manufacturers should be P1,800 per 50-kilogram bag, instead of the prevailing P2,200/kg bag. The government is also considering forms of tax assistance to help bring down prices. SRA Deputy Administrator Aida F. Ignacio said in a phone interview that the SRA would also recommend the removal of the 38-percent duty on imports. Meanwhile, Augusto B. Santos, director-general of the National Economic and Development Authority, told Palace reporters that the Cabinet had discussed a proposal to extend the tax subsidy by which the National Government would, on paper, shoulder duties for sugar imports. The country's stocks of both raw and refined sugar stood at 507,795 MT as of January 3, with raw sugar at 400,700 MT, according to the latest government data. The Philippines forecasts raw sugar output to increase to 2.18 million MT in the current crop year to August from 2.1 million, due better weather conditions and increased fertilizer use. The Philippines consumes about two million metrictons of sugar yearly. Even with rising local demand, Coscolluela said the country was still hoping to meet any increase in its US export quota. The Philippines expects its annual raw sugar export quota of 137,000 MT to the United States to be raised by 60,000-65,000 metric tons more. — Reuters with Neil Jerome C. Morales and GSDP, BusinessWorld