NFA to bid out license for export of sugar

The National Food Authority is scheduled to bid out next week the license to export to the world market 25,000 metric tons of locally produced sugar.

The move is in response to a presidential directive for the NFA to export a total of 100,000 metric tons of local sugar in order to mop up excess stocks and prop up sagging domestic sugar millgate prices.

Domestic sugar prices plunged to as low as P600 per bag (or even lower than production cost) and have remained in this vicinity for sometime now compared to P800 per bag in September, due to unabated smuggling of cheap imported sugar.

NFA deputy administrator Gregorio Tan said an initial 25,000 metric tons of raw sugar which the agency earlier purchased from local farmers will be the subject of a tender offer on Jan. 27.

More than 15 international traders accredited with the Sugar Regulatory Administration (SRA) are expected to participate. "Because of the SRA accreditation, we deemed there was no need to prequalify anyone," Tan said.

Tan told The STAR that only one trader who will post the highest bid will be declared a winner.

President Estrada earlier approved a scheme recommended by Agriculture Secretary Edgardo Angara whereby the NFA will re-export 100,000 metric tons of local sugar, and then import the same volume during the lean supply months later this year.

Tan, for his part, said he is still not sure whether the 100,000 tons of refined sugar that will be imported will already include the minimum access import volume (MAV) for sugar or not.

He said that there is still that special provision in the General Appropriations Act for 2000 whereby the NFA will still import the sugar MAV. "Unless this special provision is changed, then we will still be bringing in the MAV," Tan said.

The MAV is a commitment made by the Philippine government under the GATT Uruguay Round whereby a certain volume of agricultural products will be imported at preferential tariff rates.

Meanwhile, in addition to its rice, corn, and sugar procurement activities, the NFA has also been authorized by the President to buy fertilizers and sell these to farmers at lower-than- market rates.

Tan said that they expect to sell urea fertilizers at prices that are at least 10 percent lower than market.

Initially, NFA will be sourcing the urea from the Philippine International Trading Corp. (PITC). "We do not know where PITC got the urea, but PITC has been in this business for some time now," he said. PITC is an agency under the Department of Trade and Industry and has undertaken countertrade activities for the government.