INDUSTRY leaders are opposing the proposal to convert high fructose corn syrup (HFCS) from “D,” or world market sugar, to “B,” or domestic market sugar.
Enrique Rojas, president of the National Federation of Sugarcane Planters (NFSP), in a statement, said the move is a “double murder” against the sugar producers.
“For one, the additional supply of sugar to the domestic market, at this time when the milling season is at its peak, will definitely and significantly drive down domestic sugar prices, when sugar producers are only partially recovering from low sugar prices in the past years due to HFCS importation,” Rojas stressed.
Moreover, most of the “D” quedans are already in the hands of the traders, and it is the traders, not the sugar producers, who will benefit from the difference between the low-priced “D” sugar and the higher-priced “B” sugar if such conversion is allowed.
Rojas assured consumers that the sugar industry has sufficient production to supply the local demand. Thus, there is no reason to increase the local supply by dumping “D” sugar to the domestic market, the statement said.
Instead, the Sugar Regulatory Administration (SRA) should expedite the shipment of this crop year’s “D” sugar to the world market, he urged, to ensure that “D” sugar does not leak to the local market, the statement said.
Since the start of the current milling season last September 1 until January 21, 10 percent of national sugar production was allocated as “D” sugar.
From the week ending January 28 until now, the “D” sugar allocation was reduced to only one percent.
However, as of March 4, SRA records show that only 7,841 metric tons of “D” sugar have been shipped to the world market.
Moreover, Rojas said that NFSP opposes the request of soda manufacturers to convert their HFCS stocks for sale in the domestic market.
Beverage makers used to import HFCS as a sweetener for their drinks, thereby causing the crash of domestic sugar prices for the past years, the statement added.
The tax reform law, which took effect this January, imposed a higher excise tax on beverages using HFCS as a sweetener, compared to drinks using local sugar. Thus, these companies shifted to domestic sugar, it said.
The statement added that some beverage companies have a large stock of HFCS which they preferred not to use anymore. They requested SRA to classify it as “D” for export to the world market.
Apparently, these companies were not able to export all of their HFCS stocks, and they are now asking SRA to allow them to reclassify the stocks into “B” so that they can sell the HFCS in the domestic market.
“Sugar producers suffered low prices for years because of HFCS importation. We did not tell the beverage companies to import huge volumes of HFCS. Now that they can’t consume or export their HFCS, they should not be allowed to dump the HFCS in our local market,” Rojas emphasized.
SRA intervention sought
The General Alliance of Workers Association (Gawa) is appealing for the intervention of the SRA on the proposed reclassification of HFCS.
Gawa secretary-general Wennie Sancho said he sent his letter to SRA board director Emilio Yulo III on Thursday, March 22, for his intervention on this crucial issue as it is not good for the labor sector and management in the sugar industry.
In his letter to Yulo, Sancho said they appreciate the efforts of SRA to stop the entry of HFCS into the local market as well as the export of locally produced sugar, adding that this was among the factors responsible for the recovery of the sugar industry despite the volatility by the low prices of sugar.
“We strongly register our vehement opposition against this conversion. We strongly believe that any conversion of ‘D’ sugar into ‘B’ would forestall the recovery of the sugar industry and we would be back to square one, where apprehensions about the displacement of workers loom large,” he said.
Sancho noted that the Regional Wage Board (RWB) in Western Visayas is set to begin the series of public hearings on April 24, in lieu of the P150 per day wage increase petition filed by organized labor.
“In the event that an increase in the daily minimum wage of workers will be granted including the workers in the sugar industry, by the RWB, the management of the sugar industry would not be in the position to comply with this mandated wage increase, if the price of sugar is very cheap,” Sancho said.
He said they want to prevent a situation that the workers will be restive and it has always been their desire to maintain industrial peace.