news/updates
Biofuels Act to open alternate mart for sugar planters
By Paul Anthony A. Isla
BusinessMirror
January 22, 2008
WITH the Biofuels Act of 2006 giving local sugar growers a little glimmer of hope for their produce, but which now is being doubted, local sugar planters cited the need for an alternative market to make them thrive in the local sugar industry.
“Sugar is a very volatile commodity, and right now the price of sugar in the world is so low that if we are going to allow the importation of sugar at very low tariff that's been proposed, we will all be out of business,” V. Francisco Varua, executive vice president of the Philippine Sugar Millers Association (PMSA) said.
The PMSA said if the local industry would not have an alternative market, and with the Asean Free-Trade Agreement (AFTA) soon to kick in—which will bring the price of sugar down—the local industry will be not be able to survive.
Varua said the industry cannot survive this scenario and this is actually why it has been looking for an alternative, considering that the local sugar industry employs more than 650,000 people and produces more than 2.2 millions metric tons of sugar.
For the last five years, according to Varua, the local sugar industry has been exporting sugar in the world market and also exports sugar to the US market.
Varua said the local sugar millers, for instance, have invested several billions of pesos to upgrade their facilities in order to become competitive, and the planters have acquired modern facilities, tractors and the like in order to become more efficient.
And with the Biofuels Act already enacted, Varua said several companies have already invested money in the local sugar industry to put up ethanol-producing plants.
“What will the foreign community say to us if, after they have invested money here—and then the government changes rules in midstream? Eventually, no one will believe in the Philippines and invest here because of the way we change horses in midstream,” Varua said.
“And since we have excess sugar for five years, we've been selling all our excess sugar to the world at 50 percent of what we should be getting in the domestic market,” said Francis P. Treñas, president of Panay Federation of Sugarcane Farmers Inc. (PanayFed).
The PanayFed official said they had to sell to the world market at a subsidized price in order to protect themselves and just keep on selling the excess that they have.
“Now, if we continue to do that without an alternative where we can put the excess sugar, we will not be able to sustain sugar farming because we will be selling at a loss,” Treñas said.
Bukidnon Gov. Jose Ma. R. Zubiri Jr. earlier said the need to supply sugar cane to ethanol producers will not be competing with the need to supply sugar cane for the country's food requirements.
“Sugar is only an additive compared with rice and corn, which are staple food,” Zubiri said, adding that the sugar industry is just after the protection of the sugar industry.
Zubiri said the Biofuels Act provides us with an alternative market for the sugar cane the sugar industry produces. Otherwise, with the AFTA to take effect soon—which will give a zero-rated tariff on imported sugar—the sugar industry will not be able to survive.
“The sugar industry actually produces more than the local demand. We even have enough sugar cane to give to ethanol plants and maintain prices of sugar to survive,” Zubiri said.
For his part, Rafael L. Coscolluela, Sugar Regulatory Administration (SRA) administrator, said his agency is mandated, under the Biofuels Act, to issue a certification on the suitability of land proposed for the production of sugar cane for ethanol.
Coscolluela assured that the SRA will not issue a certification for areas proposed for ethanol production, especially if the SRA deems that such will threaten the supply of sugar for the domestic market.
Coscolluela said the Biofuels Act has a safeguard as far as sugar is concerned.
“So, as far as we're concerned, this issue of food versus fuel will not be a real issue for the Philippines, as we [SRA] will not allow areas for rice, corn and sugar cane to be encroached on by ethanol producers if we deem it threatens the supply of sugar for the domestic market,” Coscuella said.
