PH sugar industry to survive, says exec

BACOLOD, Philippines—“We are not afraid of 2015, we are confident that the Philippine sugar industry will survive,” Francisco Varua, president of  Philippine Sugar Millers Association and Philippine Sugar Research Institute (Philsurin), said on Monday.

Under the Asean Free Trade Area agreement, the tariff on imported sugar entering the Philippines will drop to a nominal 5 percent next year.

“We have been preparing for 2015,” Varua told the Inquirer, citing sugar mills retrofitting their facilities to produce ethanol and to cogenerate power, and efforts to increase production in farms and mills.

A lot of tariff barriers could also be set up, he said, but refused to specify what they are. “We do not want to telegraph our punches to the competition,” Varua said.

Other sugar-producing countries are using non-tariff barriers, there is no reason we should not use them ourselves, he said.

Varua also cited efforts of Philsurin that have enabled the country to produce high-yielding varieties of sugarcane to improve production.

The expected 5-million-metric-ton oversupply of sugar worldwide has also dropped because of weather conditions, and, by the next crop year, a balanced production against demand is expected, Varua added.

The demand for sugar from China and Indonesia is also expected, and they are expected to source their supply from the Philippines and Thailand, he said.

That is because freight cost for sugar from Brazil is rising, making it a more expensive commodity by the time it reaches Asia, he said.

In fact, 40 sugar mills in Brazil have closed down to cut their losses, he said.

On the other hand, the price of sugar in the world market is rising, he added.

“We are confident the Philippine sugar industry will survive 2015, if we survived the Nasutra (National Sugar Trading Corp.) days under Ferdinand Marcos, this is nothing,” he said.

Meanwhile, Varua said he hoped Congress would approve the proposed Sugarcane Act soon.

The government has not provided any help to the sugarcane industry. “We are not asking for subsidy, we are asking for infrastructure help to boost the industry,” Varua said.