IBON: Bulk export of sugar to blame for short supply

The country's bulk and off-season export of sugar to the United States to exploit increasing global prices may be to blame for the tight domestic stocks of sugar, a militant think tank said. IBON Foundation said the country may have exported sugar stocks reserved for domestic consumption and strategic reserve sugar because of the high global prices. "(Such exports may have left) a tight supply for local consumption. As a response, the government is set to import 150,000 metric tons of sugar that is duty-free to dampen increasing local prices," it said in a statement. Also, IBON said the government importation of sugar is unsound because it fuels more speculation in the market and sends the message that there is indeed a shortage in sugar supply. Instead of importing sugar, it said government should suspend sugar exports, while the Sugar Regulatory Administration (SRA) to should fulfill its function of "genuinely regulating sugar exports to ensure the interests of consumers." The group said the country exported in bulk some 137,000 metric tons (MT) of refined sugar to the US in January 2010, a month ahead of its usual schedule of export. Sugar exports are usually done in installments every month starting February keeping pace with the season, IBON noted. Also, IBON said it has been sugar exporters’ practice to re-allocate local stocks for US quota and world market sugar so sugar may be bought at higher prices - but at the expense of ensuring the domestic sugar supply. On the other hand, IBON criticized the move to import sugar, which it said benefits only the big traders taking advantage of the high prices in the world market. It added the tax-free importation will cost the government P100 million for every 10,000 metric tons or P2.1 billion in foregone revenues. Last month, the government gave the go-signal to import 60,000-150,000 metric tons of sugar from neighboring Asian countries. In the middle of January, National Economic and Development Authority (NEDA) Acting Director-General Augusto B. Santos told traders to proceed with a plan to import to stabilize prices. [See: Sugar imports get state nod to stabilize prices] - LBG, GMANews.TV