Sugar accounting 2

Yesterday I cited the advertisement of Steven Chan where he claimed that he had presented to the Sugar Regulatory Administration “clear accounting” that the “large volume of “D” sugar is now missing.”

This class of sugar is purchased from the producers at a cheaper price than the sugar for our domestic consumption. In effect the producers are “forced” by SRA to sell cheap by the method of allocating certain portions of their sugar to this classification.

Steven Chan told Sugar Regulatory Administration chief, Regina Martin, that the “clear accounting” he claims to be the accurate ones “were based on official records” of the SRA.

Despite this claim of huge missing “D” sugar and erroneous data, SRA kept silent. Chan also averred that Martin or her office “cannot produce and refuse to give counter evidence to dispute our findings”.

Why is SRA taking a stoic silent posture considering the seriousness of the issue? Does its silence mean that Chan is correct and that indeed SRA cannot refute his claim by showing a superior proof of accuracy? Does SRA think that by keeping quiet the issue will fade away?

I said earlier the accuracy of the data means credibility of the SRA; its resounding silence only reinforces the belief that SRA is manipulating sugar statistics for unknown purposes. When Martin wrote me on October 14 she sanctimoniously declared “sugar statistics are held vital to the formulation of sugar policies by SRA and to the business decision of the stakeholders. Enshrined with utmost transparency, SRA cannot and does not manipulate sugar data nor feed them in advance to a favored few.”

In the face of Chan’s public assertion that SRA has not produced contrary evidence and has refused to dispute his allegation that SRA’s data are inaccurate, how can we accept Martin’s word of transparency and not believe that SRA manipulates sugar statistics? If indeed sugar statistics are manipulated can we accept her word that sugar data are not “feed in advance to a favored few?”

A little logic tells us that if data are manipulated then it is to serve a hidden purpose, as giving them to a “favored few.” The “favored few” then can amass millions each crop year through advance knowledge that the manipulated statistics opens the area for huge profits.

Let’s illustrate. If SRA under-declares consumption, then it will appear that there is more sugar than we can consume. To balance production and consumption (under-declared) SRA will allocate a lower volume to consumption and thus show an excess. This excess is then classified to cheaper “D”. The producers have no choice but to sell their “D” low-priced unless they have money to wait for a better offer. If they know there will be a shortage for domestic consumption, they can wait. But most do not know the true supply situation (SRA keeps it a secret and planters rely on SRA’s word) then they will have to sell even at a loss. They are comforted by the higher price of their domestic sugar and just be satisfied with what is called “composite price”.

A sugar trader with inside information of the true domestic consumption situation will buy as much cheap “D” as he can, even if he has to borrow money and pay interest and wait. He knows that when the domestic sugar market starts to dry up, SRA will be “forced” to convert portions or all of the “D” sugar into domestic that carries a higher price. This is justified to balance the market supply and make consumers happy. The hedging trader rakes in a lot of money.

The demand of Chan for accurate data is therefore a serious matter that SRA, if indeed it has not manipulated the data feed to the public and the planters should answer and refute Chan’s allegations with data that can stand scrutiny. But so far SRA has not, forcing Chan to come out publicly through an Open Letter.

Considering that the advertisement appeared two weeks ago, is not SRA’s silence a tacit admission that Chan is right – that SRA’s accounting is erroneous, ergo questionable?  Martin’s claim that its statistics is “enshrined in utmost transparency” goes kaput.

Chan said that he has “pointed out several times in the past” this error but SRA adamantly refused to answer. Is there a criminal liability on the part of Martin for this obdurate posture? Is she not opening the avenue for a criminal complaint under the Graft and Corrupt Practices Act?

Let’s continue next week.*

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