Agriculture Secretary Emmanuel Piñol wants to hold in abeyance an order by the Sugar Regulatory Administration (SRA) regulating the entry of high fructose corn syrup (HFCS) into the country, saying that big business was not included in the consultation process.
“There is a problem with the SRA’s Sugar Order No.3 because it will regulate the importation of HFCS. Now, Coca-Cola and Pepsi Cola are appealing to me because they were not properly consulted,” Piñol told reporters.
“They came to me. My recommendation to President Duterte is for him to authorize me to hold in abeyance Sugar Order No. 3 pending proper consultations with the stakeholders,” the DA chief added.
Piñol said there is a need to protect big investments because “Any change in the type of sugar that they will use in producing their softdrinks will involve changing their machineries and equipment.”
HFCS is a key ingredient used by softdrink manufacturers in lieu of locally produced cane-based sugar.
Earlier, SRA Administrator Anna Rosario Paner said that the agency will start issuing import release certificates to accredited traders and importers to prevent the influx of imported HFCS and chemically pure fructose in whatever intensity or form.
“There has been a reported increase in the volume of sugar imported into the country, particularly HFCS, which is a type of sugar the importation of which affects the balance of supply of sugar in the country,” Paner said in the order.
Various stakeholders have called on the SRA to stop the unregulated importation of HFCS, which could potentially displace the use of locally produced sugar and negatively affects the balance of production and threaten the livelihood of sugar industry workers, as well as hindering the growth of the industry.
Local sugarcane producers said that from 2011 to 2016, beverage manufacturers and food processors imported almost 800,000 metric tons of HFCS into the country, displacing the demand for 23 million 50-kilo bags of locally produced sugar and depriving the country, particularly the sugar industry of P35.2 billion in potential income.
They added that for the crop year 2016 to 2017, HFCS importation brought down sugar prices from a high of more than P1,800 per bag to less than P1,500 per bag, translating to potential revenue losses of about P20 billion for the current crop year.
To prevent further damage to the local sugar industry, Paner said that only importers or consignees of imported HFCS duly-registered with the SRA at the time of the application for clearance for release will be allowed to import sugar starting next month.
Also, applicants for the release of imported HFCS and chemically pure fructose must also submit to the SRA’s regulation department in Quezon City various requirements before the application can be accepted for processing.
Paner said that they came up with the decision following several consultations with all stakeholders.
Piñol, however, admitted that he was not present during the consultation process conducted by the SRA since he was in another engagement in Palawan. He added that it was Agriculture Undersecretary Sigfredo Serrano who represented the DA during the consultations.
“Usec. Serrano said that he agreed with the SRA’s position. But the flaw is that I think some stakeholders were not consulted like Coca-Cola and Pepsi Cola, which are actually big businesses in the Philippines. We have to hear them on the impact of the order,” Piñol said.
“I am not disregarding the Usec’s recommendation but when I listened to the presentation of Coke and Pepsi Cola, I think their concern is legitimate,” he added.
Because of the sugar order, the DA chief said that softdrink manufacturers were having a hard time withdrawing their imported HFCS from the ports, noting that the companies only have five days worth of stocks.
“They said that there is a disruption in their production. The situation also has implication on our trade relations with China since majority of the HFCS came from them,” he said.
“If that is the policy direction of the government, we should at least give them enough time to make adjustments in their processing of in their products,” Piñol added.
He said that he will meet with the SRA board on March 23 after his trip to Myanmar and Thailand.