Phl sugar industry fears impact of unified market

CEBU, Philippines - While other industries are on their feet preparing themselves for the ASEAN unified market come 2015, sugar producers and farmers feel susceptible with the entry of cheap sugar from other countries given the non-tariff barrier to be implemented during the economic integration that could cause a plummet on domestic sugar prices and production. 

Earl Parreño of the Social Enterprise Empowerment for Rural Development, Inc. (SEED) admitted that sugar industry of the country is threatened with the ASEAN economic integration that would take place two years from now.

He noted that the local sugar actually is able to compete with the sugar produced from other countries given that there is a tariff barrier. However, the zero tax implementation, once imposed by 2015, shall force consumers to buy the imported sugar from Australia and Thailand which cost cheaper than the locally-produced.

“We are threatened by the free trade agreement by 2015. The local sugar industry will no longer be protected with the tariff barrier. Pag pumasok sa Pilipinas ang imported sugar ng walang tariff, bagsak ang sugar industry natin,” he stated.

He cited that this could greatly affect the province of Negros which is considered to be sugar capital of the Philippines.

He said that the Philippines produces 3.2 metric tons of sugar every year. Negros, with sugar as its most dominant product in the province, accounts 60 percent of the total country’s production. Cebu, on the other hand, contributes less than 20 percent of the national sugar production.

Parreño said that the probably price discrepancy could actually pose a threat among small-scale sugar producers who could be possibly eliminated due to stiff competition with cheap imported sugar.

A pound of Philippine sugar is priced at 16 to 17 cents while those imported from Australia and Thailand is pegged at seven to nine cents.

If the government would not take any action, he said that another famine in Negros might set in again as what happened in 1982 where it caused the province to enforce a nose-dive price movement for its sugar products.

Since last year, the local sugar industry has negotiated with the Sugar Regulatory Administration (SRA) to facilitate a fair trade system on sugar and is currently working out with solidarity markets to encourage consumers to purchase sugar at solidarity prices.

Parreño said that this could strategically prepare sugar producers for the upcoming ASEAN economic integration since their products could be bought at fair trade prices, thus decreasing the impact of the zero tariff barriers.

He added that they are also negotiating with sugar mills to undergo a fair trade assessment and be certified as a fair trade sugar producer.

He said that there are already twelve communities in the province that are producing sugar in a fair trade process while 5,000 farmers have met the required standards.

He further cited that they are encouraging farmers and millers to produce centrifugal sugar that poses a larger market compared to the usually-produced muscovado sugar. Muscovado sugar is exported to Japan, Europe and Malaysia usually at $1.10 per kilo.

They are also looking into other products that could breakthrough during the unified market in 2015. These include products produced by social enterprises such as coco water, desiccated coconut, virgin coconut oil, coconut sugar, banana flour, coffee, and gluten-free flour.

Parreño also urged the local government units and national government agencies to partner with local sugar industry players to prepare for the upcoming free trade agreement.

The Department of Trade and Industry, on the other hand, is already helping promote the fair trade market in terms of packaging and food safety standards in preparation for the ASEAN economic integration.

He also advised producers to strive hard to be more efficient so as to be able to compete with other countries in the global market.

He further encouraged Filipinos to patronize and buy local products to help small-scale producers in the country who may possibly suffer by 2015. —/JOB (FREEMAN)