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Wednesday, June 7, 2023

DA: 3 firms to import sugar under minimum access volume scheme

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Only three entities will import the 64,050 metric tons (MT) of sugar through the minimum access volume (MAV) mechanism, based on documents from the Department of Agriculture (DA).

DA documents indicated that the beginning year pool (BYP) for sugar MAV was allocated to three importers, which were all tagged as “new entrants.”

The three sugar MAV importers are Agro Bulk Marine Corp., Leslie Corp. and San Fernando Eric Commercial Inc., according to the documents.

All sugar MAV importers are international sugar traders accredited by the Sugar Regulatory Administration (SRA) for crop year 2022-2023.

SRA documents also showed that the three importers have been accredited as sugar traders for years.

Agro Bulk Marine Corp. and San Fernando Eric Commercial Inc. each received an allocation of 31,775 MT while Leslie Corp. got 500 MT.

The three importers may import sugar classified under harmonized system code (HS) 1701, which would include raw sugar, cane sugar and beet sugar, among others.

Leslie Corp. is a local food manufacturer known for brands like Clover Chips and Cheezy, among others. Meanwhile, Agro Bulk Marine Corp. and San Fernando Eric Commercial Inc. are also registered rice importers, according to the Bureau of Plant Industry.

Sugar industry stakeholders and even some government officials said they were taken aback by the decision of the DA to open the MAV for sugar the current crop year, as it has not been used for more than two decades.

PHL commitment

The MAV for sugar was last opened in 2002 through a sugar order issued by the SRA, an attached government-owned and -controlled corporation of the agriculture department.

Official World Trade Organization (WTO) documents showed that the administration of the sugar MAV is under the purview of the SRA unlike the other commodities that are governed by the DA’s MAV Management Committee.

MAV is a trade mechanism that allows the importation of agricultural goods at a lower tariff. Imports outside the MAV or also known as out-quota are slapped with a higher tariff rate.

It is part of the Philippines’s commitment for selected agricultural commodities under the WTO’s Agreement on Agriculture.

In the case of sugar imports, supplies within MAV are slapped with a 50-percent tariff while those outside MAV are levied with a 65-percent tariff.

However, any sugar imported by the Philippines from the Asean region will only have an applied tariff rate of 5 percent under the Asean Trade in Goods Agreement or Atiga.

The United States Department of Agriculture-Foreign Agricultural Service in Manila said sugar imported under the MAV could be P7 per kilogram cheaper than prevailing local retail prices. (Related story: https://businessmirror.com.ph/2023/01/13/importation-seen-to-bring-down-price-of-sugar-by-p7-per-kg/)

Pundits told the BusinessMirror that the sugar MAV could be effective in bringing in supplies from non-Asean sources, such as Brazil and Australia, especially if there are concerns with the stocks of neighboring countries like Thailand. (Related story: https://businessmirror.com.ph/2023/01/02/govt-mulling-over-mav-scheme-for-sugar-imports/)

It was President Marcos Jr. who ordered the fast-tracking of the importation of refined sugar through the MAV mechanism as a measure to stabilize sugar prices that have remain elevated. (Related story: https://businessmirror.com.ph/2022/12/22/government-to-tap-mav-scheme-for-sugar-imports/).

In a memorandum order dated December 20, 2022, Senior Agriculture Undersecretary Domingo F. Panganiban said Marcos, who is concurrently the agriculture chief, is “concerned” about the “very high” inflation rate of sugar.

As the agriculture secretary, Marcos sits as the chairman of the SRA board as well as the chairman of the MAV Management Committee, the highest policymaking body on MAV.

The DA-MAV Secretariat, which facilitates the utilization of MAV, made a call for applicants for MAV Year 2023 last October 2022. The application period for interested importers under the current MAV year was from November 2 to 29, according to public documents.

The 64,050-MT sugar MAV is part of the 504,050-MT sugar importation program approved by the national government recently to boost domestic supply and pull down retail prices that have skyrocketed beyond P100 per kilogram.

Imports under MAV must arrive in the country within a given MAV year, which runs from February until January of the following year.

However, SRA officials have disclosed publicly that they want to manage and calibrate the arrival of sugar imports under MAV to ensure that it will not coincide with the milling seasons.

The SRA has been tasked to draft the import guidelines for sugar imports under MAV, including the classification and reclassification of imported stocks.

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