Some of you might have seen memes spread on social media about how a soda is now more expensive than an alcoholic beverage, or you might have heard from a friend that they bought a soft drink at a local sari-sari store at twice its normal price. These are just some of the many effects of the shortage of sugar supply in the country which started earlier this year and is still felt until now.
Filipino business owners are becoming more and more worried about the deteriorating local supply of sugar. According to the Department of Agriculture - Sugar Regulatory Administration (DA-SRA), local supply is expected to last only until the third quarter of 2022. This would primarily impact producers and distributors of beverages and processed food products. However, the burden would eventually fall to the end consumers, as these producers may transfer the burden only to the customers by increasing their selling price.
Initially, the DA-SRA released the Sugar Order No. 4, which directed the importation of 300,000 metric tons (MT) of sugar to the country. However, this was subsequently denied by the government while it resolved the alleged controversy on sugar hoarding.
On September 1, the President and Agriculture Secretary Ferdinand Marcos, Jr. finally signed Sugar Order No. 2 or the Sugar Import Program issued by the DA-SRA. In this program, the DA is expected to import a maximum of 150,000 MT of refined sugar for Crop Year 2022-2023, which is expected to arrive not later than November 15, 2022. This would ensure an adequate and stable supply of sugar for domestic consumption, as well as stabilize sugar prices at a level reasonably profitable to the producers and fair to consumers.
Half of the 150,000 MT is allocated to industrial users while the other half is allocated to end consumers. The import program shall be open to all duly registered DA-SRA International Sugar Traders in good standing for Crop Years 2020-2021 and 2021-2022. Those who have participated in previous import programs as industrial users under Sugar Order No. 3, series of 2021-2022, are now disqualified to participate.
In this arrangement, each participant shall completely distribute their allocations to clients for industrial use and/or direct consumption one month from the receipt of the imported sugar. The imported sugar shall only be stored in SRA-registered warehouses or directly in the declared industrial user’s or consumer’s warehouse, as indicated in the importer’s application. The warehouses must be pre-inspected and must be positioned to avoid co-mingling of stocks. Should there be any domestically produced sugar in the same warehouse, imported sugar shall be segregated for monitoring of the SRA. Each warehouse shall maintain a ledger that will record the dates of delivery of the imported sugar to the SRA-registered warehouse and the dates and volume of withdrawal of the same sugar by the industrial user or consumer.
The importers shall be subject to a performance bond of P750.00 per 50 kg of sugar. Such bond will be released upon submission of proof of purchase of locally produced sugar with a volume equal to the imported sugar that may be allocated to the participant. The purchase thereof must be consummated not later than August 31, 2023. Noncompliance will render the bond forfeited in favor of DA-SRA for the benefit of fertilizer subsidy programs and other developmental programs to assist sugarcane farmers.
On top of sugar supply woes, the country is also experiencing a shortage of salt supply, where the Philippines has been importing 93% of its total salt supply in recent years, even though the country has more than 36,000 kilometers of shoreline. To aid this problem, the DA, together with the Department of Environment and Natural Resources, is looking for areas suitable to utilize as salt farms. The Department of Trade and Industry is also assisting in upgrading the production technologies of local salt producers and manufacturers.
The remedies for the sugar and salt shortage are underway; however, concerns remain whether the next shortage is just around the corner. Are the measures undertaken seen as temporary remedies? Are there better alternatives that the government can explore for us to have a sustainable supply of basic food commodities like sugar and salt? How will this impact the country and, ultimately, the end consumers in the long run?
Results are yet to be seen. For now, it seems we can only hope.
As published in Mindanao Times, dated 07 October 2022