Sugar Alliance Seeks Proper Consultation on HFCS

The Sugar Alliance of the Philippines is asking for “proper consultation” as it found the proposed “win-win” solution of Agriculture Secretary Emmanuel Piñol as “unacceptable and continues to reek of preference for the beverage companies rather than for sugar farmers.”

The SAP, in statement yesterday said that “Secretary Piñol seems to be seeing only one side of the equation, and unfortunately that side favors the multinationals rather than the sector he needs to be protecting.”

The group composed of leaders of the sugar industry in the Philippines was reacting to the latest announcement of Pinol that “big beverage firms have expressed willingness to buy more locally produced sugar – at lower prices.”

Piñol said Coca-Cola FEMSA Philippines and Pepsi Cola plan to purchase their sugar requirements for next year in advance, to ease the pressure on sugar planters who have been complaining of the drop in prices of the sugar because of the entry of high-fructose corn syrup (HFCS) from China.

He noted that HFCS accounts for 90 percent of Coca-Cola’s production while sugar accounts for the rest, 10 percent.

“They (Coca-Cola) offered to increase their consumption of local sugar from 90:10 to 80:20,” Piñol said, adding that “both softdrinks manufacturers, which have relied on HFCS since 2010 when prices of local sugar doubled, would need at least six months to restructure their production processes.

“They just need enough time to adjust their processing, manufacturing process… they need to install new clarification machines to convert raw sugar to syrup that can be used in their softdrinks,” Piñol explained.

However, the group said that “we have been calling for `proper consultation’ and we are taken aback by these pronouncements from the Secretary sans a dialog, foremost with the affected parties, and in this case, the sugar industry stakeholders.”

“We take offense at the offer of Coke to increase their consumption ratio from 90:10 to 80:10 when then, they have been producing their beverage at 80:10, 80 being sugar,” they said.

They added that “Our farmers have been bleeding since sugar prices have dropped to P1,300 from P1,800 per lkg since the start of the crop year. Can’t the Secretary see what six more months will do to the very farmers he is mandated to protect?”

“Secretary Piñol even went further to echo beverage companies’ request to give them an opportunity to buy `D’ sugar which is intended for the world market, fully knowing that `D’ sugar prices is crippling to the industry and for which we only agreed to flush-out unmoving sugar in the country and in our effort to stabilize the industry,” it said.

The SAP pointed out that “D” sugar which accounts for 20 percent of the country’s produce is currently valued at P900/LKg while “B” sugar which is 74 percent is at present at the P1,400 level. The remaining six percent is “A” sugar which falls under the US quota.

“Piñol knows that even at P1,300 our farmers are barely surviving and have nothing extra to even buy inputs for the next planting. How can he even entertain proposals of allowing these industrial users access to “D” sugar? We are baffled that the Secretary continues to speak for the beverage companies yet have no time to dialog with us so he can see the real picture from the ground and perhaps finally understand where we are coming from us,” they said.

The sugar leaders said “They keep on hyping that sugar produced locally is expensive compared to those from other countries. That is true.”

“But government must also take into account that unlike in other countries, our farmers here have never been given any government subsidies and we are even taxed high like any other industries. Perhaps, if Secretary Piñol can also address this, then maybe, and only maybe can we survive on a much lower priced sugar,” the SAP said.

Local sugarcane producers said that for the past six years, beverage makers and food processors imported almost 800,000 metric tons of HFCS into the country, displacing the demand for 23 million 50-kilo bags of locally produced sugar and depriving the country, particularly the sugar industry, of P35.2 billion in potential income.

For the current crop year alone, HFCS importation has pulled down sugar prices from P1,800 per bag to about P1,400 per bag, translating to potential revenue losses of about P20 billion.*(Eugene Y. Adiong)