January 27, 2023

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DA official: Sugar imports via MAV system are unlikely to dampen prices

The Department of Agriculture (DA) said importing sugar through the Minimum Access Volume (MAV) system may not affect domestic prices of the sweetener.

Deputy DA spokesman Rex C. Estoperez said sugar imported through the MAV system is likely to be sold at current prices due to high tariffs.

“The tariff for MAV compared to those coming from regular importation is higher. So the price will not go down,” Estoperez said in a television interview last Tuesday.

The government imposes a 50 percent tariff on sugar imported within MAV and 65 percent on sugar outside MAV.

MAV refers to the quantity of a specific agricultural product that may be imported at a lower tariff, as promised by the Philippines to the World Trade Organization under the Uruguay Round Final Act.

However, most of the country’s sugar imports come from the Association of Southeast Asian Nations, which only pays a 5 percent tariff.

Etoperez made the statement amid fears that the arrival of the imported sugar will coincide with the cane harvest season, which could impact mill prices.

“What we’re saying is they’re helping to bring something [sugar] in urban centers where the price of sugar is high so they can help bring it down,” he said.

Last week, President Ferdinand R. Marcos Jr. ordered the DA to import over 64,050 tons of sugar to help “stabilize” the price as it has pushed up inflation.

With the arrival of imported sugar, the President hopes to stop the steady rise in sugar prices.

Etoperez has also confirmed that three parties have already applied for the MAV.

However, before the sugar import can continue, it will have to go through numerous “finalizations”.

“First we get the position of the millers, PSMA [Philippine Sugar Millers Association Inc.]. Then we will convene the Council. The Minimum Access Volume Management Council decides on the recommendation [for importation].”

Last week, sugarcane growers again urged the government to take action to lower retail sugar prices, which have remained high despite the drop in factory prices.

The Confederation of Sugar Producers Association Inc., the Panay Federation of Sugarcane Farmers Inc. and the National Federation of Sugarcane Planters Inc. also called on the government to engage the industry in “serious” dialogue. The three associations of sugar cane producers represent 50 percent of domestic production.

“We share the government’s concerns about the current inflation rate haunting the Philippine economy. This inflation has hurt not only consumers but also Filipino farmers, who are reeling from escalating production costs. We therefore support all reasonable measures to contain inflation,” it said in a statement.

“We are therefore concerned that the reported ‘very high rate of inflation of sugar, confectionery and desserts’ is seen as a major factor behind inflation and that action needs to be taken to address not only supply but also sugar prices in the domestic market stabilize.” they added.

However, the producer groups stated that importing sugar through the MAV system to reduce retail sugar prices was not justified at this time.