The Philippines is the ninth largest producer of sugar in the world and the second largest in Southeast Asia, next to Thailand.
Nearly 60 percent of the annual sugar production comes from the Western Visayas region, in the islands of Panay and Negros where there are nearly 20 sugar mills. A dozen others are in Luzon, Eastern Visayas and Mindanao.
For the 2023 marketing year, the United States had projected sugar production to fall by 50,000 metric tons to 2 million metric tons due to high fertilizer costs, resulting in lower production volume.
The sugar industry is still recovering from the impact of Typhoon “Odette” in December 2021, which also affected the volume of production for marketing year 2022.
The projected sugar consumption for 2023 is about 2.3 million metric tons, which means there will be a shortage of 300,000 metric tons, forcing the Sugar Regulatory Administration (SRA) to scrap the more than 145,000 metric tons of sugar export allocation under the quota system of the United States.
Washington’s trade office has increased by 2 percent the sugar quota allocation for 2023 from about 142,000 metric tons in 2022. It is the third largest sugar quota after the Dominican Republic and Brazil.
The Philippines’ sugar quota is part of the special relationship between the former colonial master and its former colony. The Philippines was treated as a state under the United States and that status remained even after the country won its independence in July 1946.
Almost 100 percent of sugar production goes to US, local markets and industry users, like soda companies. Only 1.3 percent of sugar production goes to alternative fuel (bioethanol), muscovado, and vinegar.
Before the collapse of the sugar industry in 1980, at least 20 percent of the country’s annual export products in 1950 and 1960 were from sugar.
It was not only the source of foreign currency but the wealth of the local elites depended on sugar production. However, sugar prices in the world fell in the 1980s, causing social unrest on the island of Negros as Maoist-led rebels grew stronger.
Based on the US Department of Agriculture website, the Philippines will not export sugar in 2023, as it will allot 100 percent of its production to domestic consumption because of lower output. It will be the second time in a row the Philippines will allocate its sugar production to the local market.
Based on production data from the SRA and the USDA, Leocadio Sebastian was correct. There will be a projected 300,000 metric tons of sugar for the local market. If the Philippines will allocate 145,000 metric tons for the US market, the shortage will be bigger.
Sebastian became a scapegoat in the ongoing intramurals between two powerful political centers within the Marcos administration. There are some groups in the Marcos political circles that wanted the head of the “little president,” using the sugar issue.
The press secretary has been defending the executive secretary, saying he should not be blamed for the SRA Sugar Order 4 which was signed by Sebastian on behalf of the president. However, Malacanang said the order was illegal because the president never approved any importation.
Later, Ferdinand “Bongbong” Marcos Jr said the government will allow the importation of 150,000 metric tons of sugar.
Marcos did not explain why only 150,000 metric tons of sugar will be imported from Thailand when the projected shortage is 300,000 metric tons. And this does not include the sugar quota allocation from the US of about 145,000 metric tons.
The government should get its acts together on the sugar issue. The sugar output is really falling because of the fertilizer issue, a problem related to the raging conflict in Eastern Europe. Russia is the world’s largest supplier of fertilizer and the sanctions imposed by Washington and its Western allies on Moscow had disrupted the global supply chain.
The last thing that the Philippines needs, at the moment, is a bruising turf war. The government must join hands together to tackle the serious food crisis.
Sugar is not the only commodity in short supply. There is also a shortage in rice, onions, pork and chicken supplies. Typhoon Florita has wiped out the rice and corn production in Cagayan and Isabela, one of the known rice granaries in the country, which are about to be harvested.
It could affect rice and corn production. The Philippines is about 90 to 95 percent rice sufficient because of the country’s geography and climate. An average of 20 typhoons pass in the country every year and some of these weather disturbances are destructive, affecting the agricultural sector.
The Philippines also has more mouths to feed compared with rice-exporting Cambodia, Thailand and Vietnam.
The sugar issue is a litmus test to Marcos’ leadership in the farm sector.
By appointing himself as the farm sector boss, Marcos’ political fortunes will rise or fall depending on how he would handle the food crisis situation.