Thursday, February 21, 2008 RP sugar industry fights for survival By Karl G. Ombion
THE leaders of Philippine sugar industry have recently intensified calls and lobby work to exempt the local sugar from the compulsory tariff reduction program under the Asean Free Trade Agreement (Afta) come 2010.
Sugar Regulatory Administrator Rafael Coscolluela stressed that Philippine sugar producers are fighting for their life amid the bleak trends worldwide.
In a phone interview with Sun Star Bacolod, Coscolluela said industry leaders have been working on three scenarios, namely the seeking for the reclassification of RP sugar from "sensitive" to "highly sensitive" category to be able to qualify for exemption from Afta tariff reduction program, productivity improvement, and generation of alternative products from sugar.
Coscolluela explained that under the Afta tariff reduction schedule, the RP sugar industry has to cut further by 10 percent next year on all imported sugar, and the remaining or up to zero tariff in 2010.
Sugar imports in RP are currently with 38 percent tariff, or down from 60 percent in 2001. Coscolluela stressed that the move for reclassification is aimed at protecting the local industry against the possible influx of cheap sugar imports.
He said the SRA is leading the negotiations with Afta right now, but admitted that chances remain bleak.
Meanwhile to cope with the rising costs of sugar production especially transport fuel and machinery, fertilizers and labor, Coscolluela said industry stakeholders are trying to raise their productivity through various means.
He said, sugar producers have been upgrading their milling facilities to improve efficiency, raise productivity and cut on unnecessary expenses, while sugar planters are resorting to high-yielding varieties and use of organic inputs.
Coscolluela admitted though that margins of profit remain quite tight as the millgate and retail prices of sugar per 50-kilo bag remain steady at P1,010 as against the rising cost of inputs which has reached P850 to P900 per bag.
In addition to this effort, Coscolluela said the industry leaders are also working on the potential alternatives of sugar products like bio-ethanol, but added that majority of stakeholders remain skeptical to its viability.
Some sugar planters here interviewed recently by Sun Star Bacolod admitted that they are not keen on sugar alternatives even with bio-ethanol, rice or other HYV crops because "it is not easy to shift from one crop to another with all the production and technical costs that it entails."
They also doubted that with the same economic-political environment in the country, other crops or sugar-related industry may still be facing the same problems of corruption, monopoly and smuggling.
"At least with sugar, inputs and outputs are very predictable, and we could sleep with lesser worries and nightmares," they added.
