Sugar industry, small farmers hail withdrawal of case vs SRA

According to the Sugar Alliance of the Philippines, the sugar industry and farmers representatives felt “small victory” when Coca Cola announced during a congressional hearing on Tuesday that it has withdrawn the case against the validity of Sugar Order No. 3. (Photo: Lisa Risager/ Flickr)

MANILA–The sugar industry particularly small farmers in the country hailed the decision of beverage firm Coca Cola Philippines to drop its case against the Sugar Regulatory Administration (SRA) which regulated the importation of high-fructose corn syrup (HFCS) or corn sugar.

According to the Sugar Alliance of the Philippines, the sugar industry and farmers representatives felt “small victory” when Coca Cola announced during a congressional hearing on Tuesday that it has withdrawn the case against the validity of Sugar Order No. 3.

Sugar Order No. 3 states it may classify HFCS as a “Class C” or reserve sugar, “B” sugar (domestic) or “D” sugar (world market) which means corn sugar could only be used by beverage and food manufacturing companies after SRA classifies the same as “B.”

The order also imposes a fee of PHP30 per metric ton of imported HFCS.

The Sugar Board, which governs the SRA, issued Sugar Order No. 3 in response to complaints from local sugar producers that the higher consumption by beverage companies of HFCS, all of which are currently imported mostly from China with zero tariff, had caused a huge drop in domestic sugar prices by as much as PHP400 per 50-kilo bag to its current going price of PHP1,200-PHP1,300 per bag.

HFCS is derived from corn starch which itself is a chain of glucose (a simple sugar) molecules joined together. When cornstarch is broken into individual glucose molecules, the end product is corn syrup which is essentially 100 percent glucose. The most common forms of HFCS contain eihter 42 percent (HFCS 42) or 55 percent (HFCS55) fructose.

HFCS42 is mainly used in processed foods, creals, baked goods and some beverages, while HFCS55 is used primarily on softdrinks.

For the last five years (2012-2016), a total of 919,176 metric tons of HFCS have been imported based on report of the Bureau opf Customs (BOC) which declined domestic sugar prices from PHP1,800 per bag in 2010 to PHP1,200/bag at present.

Coca-Cola is using 90 percent HFCS and 10 percent sugar. In a recent meeting between SRA and beverage firms, they committed to buy this year the sugar they plan to buy in 2018 from domestic sugar producers to help stabilize domestic sugar prices.

In addition, Coca-Cola and the other beverage firms also committed to use more domestic sugar if they will be allowed access to the “D” class sugar.

Meanwhile, Coca Cola is facing charges of outright smuggling before the BOC for alleged smuggling of PHP70.1 million worth of HFCS without clearance from the SRA as stated in its Order No. 3.

Based on Customs declarations, imported shipments of HFCS ordered by Coca-Cola have continued to arrive at the Port of Manila.

The complaint, filed by Edgardo Lumanog Jr., Sugar Anti-Smuggling Organization (SASO) deputy chief, said from March 10 to 15, eight shipments of HFCS with a dutiable value of PHP70.1 million and Customs assessment of PHP8.6 million were recorded.