Industry News

Sugar regulator proposes import duty on corn-based sweetener

Posted on March 22, 2017 

Original article can be accessed here:

THE Sugar Regulatory Administration (SRA) is set to propose to the National Economic and Development Authority (NEDA) this week the imposition of an import duty for high fructose corn syrup (HFCS), the sweetener that has dampened industrial demand for refined sugar.

SRA Administrator Anna Rosario V. Paner said that the duty was requested by the sugar industry and that the agency is elevating these concerns to the NEDA.

“Industry asked whether the tariff of HFCS can be likened to those for sugar, or higher, but not kept at zero, which leads to their unbridled importation. Under that scenario we might as well close the refineries,” Ms. Paner said in a phone interview on Tuesday.

Under the ASEAN Trade in Goods Agreement (ATIGA), sugar is levied an import duty of 5%.

Asked whether the move may result in disputes with other World Trade Organization members, Ms. Paner said: “There are exceptions to the rule if foreign products are imported to the detriment of local products. It does not curtail trade but it doesn’t mean you cannot regulate.”

HFCS is shipped mainly from China with zero duty.

Last year, an estimated 373,000 tons of HFCS entered the Philippine market, up 58.72% year on year.

HFCS importation has driven down sugar prices from a high of more than P1,800/bag to less than P1,448.68 per bag as of Feb. 12, translating to potential revenue losses of about P20 billion for the current crop year.

Last month the SRA issued Sugar Order No. 3 to authorize the regulation of the HFCS imports.

However, Agriculture Secretary Emmanuel F. Piñol suspended the implementation of the order, citing the failure to consult stakeholders more widely.

Mr. Piñol said Coca-cola FEMSA Philippines, Inc. expressed concern it may not be able to supply soft drinks because its equipment is configured to use HFCS.

In a Facebook post on Tuesday, Mr. Piñol said that SRA board where he sits as chairman recommended to President Rodrigo R. Duterte during a recent meeting that the import of HFCS should be capped at just over 280,000 metric tons a year.

Ms. Paner however said that the figure is still an initial recommendation and may yet be revised. — Janina C. Lim