Importations signal ‘death knell’ for sugar
Bare Truth

Importations signal ‘death knell’ for sugar

Apr 3, 2024, 12:20 AM
Rose De La Cruz

Rose De La Cruz


Introduced to us by the Spaniards, sugar was one commodity that was not endemic to the Philippines and which historically was marketed locally by the Chinese merchants (who still dominate the local sugar market).

Despite local production after the plant was introduced to us, the Philippines continued importing albeit in small volumes the supply it needed. But current imports far outweigh the volume we produce and with the high cost of inputs this practically leaves a small margin for both planters and millers, we now see a flooding of the commodity but without the natural consequence of lower sugar prices. What we are seeing instead is a constantly rising sugar price– despite the big volumes of importation– hence it follows that traders and those in the middle of the supply chain are the ones making a killing, at the expense of Filipino consumers and the economy (since imports mean a drain in our foreign reserves).

As columnist Marlen Ronquillo wrote in the Manila Times: “Outsiders with no deep attachment to the land and blissfully unaware that the sugar industry was once a pillar of the national economy tend to view the late-February closure of the close-to-a-century-old Central Azucarera de Don Pedro (CADP) in Nasugbu, Batangas as "just-one-of-those-things" terms. And that the sugar complex, once one of the biggest producers of raw and refined sugar in the country, could always have a second life. The mill, the refinery and the buildings can be dismantled and sold. The thing of prime value is the land where the CADP sits and the sugar haciendas around it, all in Nasugbu, which is on the tourism map and where land prices have been soaring since the last decade of the past century.”

“The sugar complexes either suffer from obsolescence or are worn down by Father Time, then sold as scrap upon reaching peak unprofitability. The next stage is also predictable: the great real estate repurposing. My province, Pampanga, with its three shuttered sugar mills, has gone through that precise stage,” he added.

The abandoned Pampanga Sugar Development Co. (Pasudeco), just a few hundred meters from the Pampanga Capitol, is now part of the prime Central Luzon developments of the Megaworld Group and included in the real estate giant's REIT portfolio. The abandoned Pampanga Sugar Mill (Pasumil) in Carmen, Floridablanca town, which used to have a full stable of Arabian stallions for the sugar inspectors and was a showcase of plantation luxury, is now a mixed-use development. Real estate giants are now making a play for the sugar farms in and around the closed Sweet Crystal Sugar Mill in Planas, Porac. And the more than 1,000-hectare Alviera development of the Ayalas in Hacienda Dolores, also in Porac — which was carved out of former sugar farms, grazing areas and cogonal patches — boasts a North Forbes Park and a Leandro Locsin-designed clubhouse, he continued. The recently closed CADP in fast-urbanizing Nasugbu will, more or less, go the way of the former Pampanga sugar mills.

For people who live and breathe agriculture, however, the closure of CADP due to unprofitability, the massive sugar imports greenlighted by the government, and the general neglect of a sugar industry that has been buffeted by multiple challenges is an ominous start for the sugar sector in particular and the agriculture industry in general. A self-sustaining community with close to 500 workers suddenly running out of a lifeline in the first few weeks of 2024 is, for those who live and breathe agriculture and are deeply concerned over its future, a heartbreaking story.

Just two years ago, an artificial shortage (probably from hoarding) forced the Marcos administration to consider importing 300,000 metric tons of sugar– which was aborted by what is called the Memorandum Order No. 4 fiasco. But later that year, an even bigger amount– 450,000 MT– was approved for importation, thus depressing sugar planters and farm and mill workers.

With the despicable El Nino we are now experiencing, the last bastion of sugar farms– Negros Occidental– is practically losing its entire production and has declared a state of calamity from El Nino.

Again, the natural response is more imports. So we’re practically bidding our sugar sector goodbye forever, if government would not even try a bit to restore its former luster. We have become a country of importation (thanks to the World Trade Organization which pushed us to forget about agriculture particularly for rice and corn and focus on other crops. Never mind if our people starve in the future should we not find our food sources of stocks to spare us, so long as we comply with a commitment that only we follow to the letter. Other countries have now completely abandoned such commitments).

Going back to Ronquillo, he said, “That same calamitous start also applies to the country's staple crop: rice. From January to mid-February, an importing binge driven by the overall uncertainties in the global rice market unloaded a total of 570,000 metric tons of rice into various Philippine seaports, and that figure excluded whatever volume was smuggled through our porous borders. And there is no plan to pause the importation binge.”

The USDA, the most accurate forecaster of global rice imports, has listed the Top 10 rice importers for 2024, with the Philippines as the top. For 2024, we will import 3.8 to 3.9 MMT from the usual sources, including war-torn Pakistan and Myanmar. Yet, rice from Myanmar is for the rice-short and rice-starved Filipinos.

As for corn, the third most important crop, the future shifts from bleak to bleaker, Ronquillo said.

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