Off-season export aimed to exploit high global price at expense of local consumers
The supposed tight domestic stocks of sugar may be blamed on the country’s bulk and off-season export of sugar to the US, pushed by sugar exporters’ move to take advantage of the increasing global prices.
According to research group IBON, 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. Moreover, sugar exports are usually done in installments every month starting February keeping pace with the season.
IBON says that the country may have exported sugar stocks reserved for domestic consumption and strategic reserve sugar because of the high global prices, leaving a tight supply for local consumption. As a response, the government is set to import 150,000 MT of sugar that is duty-free to dampen increasing local prices.
IBON says that it has been sugar exporters’ practice to re-allocate local stocks for US quota and world market sugar so that sugar may be bought at higher prices, but at the expense of ensuring the domestic sugar supply.
On the other hand, IBON has criticized the move to import sugar which benefits only the big traders taking advantage of the high prices in the world market. Moreover, the tax-free importation will cost the government P100 million for every 10,000 metric tons or P2.1 billion in foregone revenues.
IBON adds that the government importation of sugar is an unsound move 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, the group calls on the government to suspend sugar exports, and urges the Sugar Regulatory Administration (SRA) to fulfill its function of genuinely regulating sugar exports to ensure the interests of consumers. (end)