Lower Import Fees Could Cause Sugar Influx


Published Date: January 13, 2025
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The Philippines' sugar planters are worried that lowering the proposed import taxes on sugar substitutes might encourage the use of other sweeteners, which would further drive down mill gate sugar prices.

Proposed Changes For Sugar Alternatives

The Sugar Council and the National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP) expressed their concerns over the weekend in response to reports that the Sugar Regulatory Administration (SRA) plans to reduce the proposed PHP 10 per 50-kilo bag fee on sugar alternatives under Tariff Line 1702. This includes artificial honey, fructose, glucose, maltose, and palm sugar.

Agriculture Secretary Francisco P. Tiu Laurel Jr. stated in a report published on December 19 that the drop in mill gate sugar prices has been caused in part by competition from imported artificial sweeteners.

In a letter dated September 16, NACUSIP and the Sugar Council requested information from Secretary Laurel, who also serves as the Sugar Board's chair, regarding the effects of artificial sweeteners on the consumption of domestically produced sugar.

In response, the SRA proposed a sugar order with a PHP 10 import clearance fee for sugar alternatives. However, according to The Philippine Star on December 20, beverage manufacturers argued that the fee would cause inflation, so the SRA was considering lowering it by a "considerable" amount.

While the Sugar Council and NACUSIP backed the SRA's decision to track import volumes, they cautioned that reducing the fee might encourage more sugar substitutes to enter the market and lower sugar prices.

Impact of Alternatives on Sugar

With the exception of a minor increase last week, mill gate sugar prices have fallen sharply.

Prices decreased from an average of PHP 2,827.85 per 50-kilo bag in the week ending October 20 to PHP 2,498.55 in the week ending December 1, per the most recent SRA data.

Prices recently dropped to PHP 2,450 per bag at one mill, just above production costs.

The decrease has been attributed to increased imports of sugar substitutes and the arrival of 240,000 metric tons of imported refined sugar under Sugar Order No. 5 for Crop Year 2023-2024. Locally produced raw and refined sugar is less in demand due to imported refined sugar and substitutes.

Locally produced sugar is being replaced by popular artificial sweeteners such as acesulfame potassium, aspartame, and sucralose.

Sucralose is 600 times sweeter than sugar, whereas aspartame and acesulfame potassium are 200 times sweeter.

Data from the Philippine Statistics Office show that combined imports of these sweeteners increased from 950,989 kilograms in 2022 to 1,100,783 kilograms in 2023.

Sucralose imports increased from 267,567 to 433,775 kilograms, while aspartame imports increased from 416,662 to 631,767 kilograms. Imports of acesulfame potassium fell from 266,760 kilograms to 2,241 kilograms.

The anticipated decline in sugar production as a result of El Niño and La Niña weather conditions is the reason for the rise in imports of artificial sweeteners, according to Agriculture Secretary Laurel.

Citing the effects on thousands of sugarcane farmers and their families, the Sugar Council and NACUSIP demanded stronger regulations to deter imports of sugar substitutes.

Reference- dailyguardian.com 

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