Food processors want 105,000 MT sugar imports
Credit to Author: EIREENE JAIREE GOMEZ| Date: Mon, 14 Oct 2019 16:19:03 +0000
THE Philippine Chamber of Agriculture and Food Inc. (Pcafi) and member Philippine Food Processors and Exporters Organization Inc. (Philfoodex) have petitioned for a sugar import allocation of about 105,000 metric tons (MT) annually to stabilize their manufacturing of products and enhance global competitiveness.
The groups have asked Agriculture Secretary William Dar that they be granted a maximum of 10-percent sugar import allocation, which they claimed would be “good enough” to significantly improve the global competitiveness of local food processors.
Pcafi President Danilo Fausto said the measure would cut sugar costs for food manufacturing from P55-P60 per kilogram (/kg) locally to P28-P30/kg in other Southeast Asian countries, particularly Thailand.
The proposed sugar import allocation, however, is beyond the country’s annual sugar production placed at 2.1 million MT.
To ensure it does not adversely affect local sugar farmers, Fausto said Pcafi and PHilfoodex’s petition for an import allocation will be accompanied by an “implementation mechanism.”
“We’ll issue a petition to be submitted to Secretary Dar and President (Rodrigo) Duterte. We will also propose an implementation mechanism that will ensure this allocation will not go to the retail market, but rather help our food producers become competitive,” he said.
Philfoodex President Roberto Amores said not even the entire 10 percent would be asked by processors.
Initially, only 50 percent of each company’s sugar requirement based on its production program is proposed to be granted to the company.
“We’re not talking about even 10 percent of the 2.1 million. We’re not requesting for liberalization. We’re requesting for import allocation for stabilization for the cause of processors,” Amores clarified.
“As a processor, you will submit your requirements based on your production program and sales. And you will be given only 50 percent of your requirement, not 100 percent,” he added.
Amores noted that the initial allocation per processor would establish credibility of the processor, who should guarantee that the sugar import would be used solely as input for its food manufacturing, not for retail to the domestic market.
The sugar import allocation for local food processors is “necessary,” Rolando Dy, chief for Center for Food and Agribusiness of the University of Asia and the Pacific and Pcafi member, said.
“We’re not competitive. Never mind [if we’re not competitive in] soft drinks which is not exportable because soft drinks are heavy. The problem is we’re not competitive in products like biscuits, candies,” Dy said.
He cited Filipino food processors can hardly compete with biscuit manufacturers in Southeast Asia.
“I’m talking about those 4,500 food processors who are paying P55 versus P28. When Apollo biscuits from Malaysia (or Indonesia) arrive here, it’s only P10. Pero pag gumawa si Mang Pandoy ng Apollo biscuits niya, P15 ang puhunan niya (If Filipino businessman Mang Pandoy produces his own Apollo biscuit, his cost is at P15),” Amores said.
Some groups have opposed such allocation because of past experiences when some imports for manufacturing input were diverted to the domestic market.
But Pcafi said that a proven effective mechanism to control such diversion is to make the food manufacturers themselves police their ranks.