PHILIPPINE sugar millers forged an alliance with their Asean counterparts to promote and support the regional sugar industry and make it more competitive globally.
Representatives from seven sugar producing industries from the Asean region met in Bangkok, Thailand last July 15, 2016, and signed a memorandum of understanding creating the Asean Sugar Alliance (ASA).
Sugar industries of Thailand, the Philippines, Indonesia, Cambodia, Myanmar, and Vietnam signed the MOU. The representative of the sugar industry of Malaysia agreed in principle to join the ASA but requested time to seek authorization to sign the agreement.
The Philippine Sugar Millers Association Inc. (PSMA) represented the Philippine sugar industry.
ASA is a private international organization composed of sugar industries of countries in the Asean region. It will serve as a venue for member industries to exchange information on the latest technology and researches on sugarcane farming, sugar production, and by-product diversification.
Initially, ASA was formed by only three members of Asean Thailand, Philippines and Indonesia in November 2012 to strengthen the sugar sector ahead of the launch of the Asean Economic Community or AEC in 2015.
Membership is on a “no commitment basis,” meaning sugar industries do not have to attain or retain a certain production, export or import volume to be a member.
PSMA was invited by the Thailand Sugar Millers Corp. Ltd. to join the ASA, and was represented by Pedro Roxas, Francisco Varua, and Atty. Jesus Barrera. Ma. Regina Bautista-Martin, head of the Sugar Regulatory Administration, was invited as guest to the event.
During the meeting, an election was held with the sugar industry of Thailand elected as chairperson and industries of the Philippines and Indonesia as co-chairperson. It was agreed that ASA shall meet once a year and PSMA signified that it shall host the meeting in 2017.
With a population of 600 million, the Asean region is seen by ASA as its priority market, and Europe as a secondary option should the European Union allow the entry of locally produced sweetener.
At present, the region produces about 17 million tons of sugar and consumes 14 million tons per year. On average, each person in the region consumes about 23 kilograms of sugar per year, according to the International Sugar Organization.
Thailand, Indonesia and the Philippines produce about 15 million tons of sugar per year combined with 10 million tons from Thailand, 2.5 million from Indonesia and 2.5 million from the Philippines.
Cambodia imports roughly about 500,000 to 600,000 tons of sugar a year. Local consumption is only about 100,000 to 150,000 tons a year and the rest is re-exported.
Notwithstanding the challenges, all speakers at the Bangkok Sugar Conference were bullish on sugar, projecting the deficit in world production to last for two more years or until 2018, with world sugar prices reaching $0.25 cents/lb.
The deficit is driven by the drop in production in Thailand to below 10 million metric tons for a second consecutive year, deficit in India with the unresolved non-payment issue for canes by millers and planters, and projected insufficient sugar allocation in Brazil due to sugar and ethanol sharing. However, there are not enough greenfield areas for expansion to immediately address global consumption requirements.