The presidents of three sugar groups called on the Department of Agriculture, Sugar Regulatory Administration and the Department of Trade and Industry to guard against excessive retail prices of sugar that are not in synch with prevailing millgate prices, on Thursday, December 22.
“Producers sadly get the blame but do not benefit from excessive retail prices, while consumers and end-users suffer when retail prices are unreasonably high,” Aurelio Gerardo Valderrama Jr. of the Confederation of Sugar Producers Association Inc., Danilo Abelita of the Panay Federation of Sugarcane Farmers Inc. and Enrique Rojas of the National Federation of Sugarcane Planters said in a joint statement.
They urged government to engage in earnest dialog with the industry to resolve sugar price concerns and other vital issues.
“There is no urgent need for importation, especially during peak milling season,” they stressed.
The three groups, representing 50 percent of domestic sugar production, share government’s concern over the current inflation rate hounding the Philippine economy, they said.
“This inflation has hurt not only consumers but also Filipino farmers who are reeling from escalating costs of production. We thus support any reasonable measure/s to curb inflation,” they said.
They are also concerned that the reportedly very high inflation rate of sugar, confectioneries and desserts is seen as a major contributor to inflation and that measures must be taken to stabilize not only supply but prices of sugar in the domestic market.
This seems to be the rationale for the urgent MAV importation plan for 64,050 metric tons, they said.
They said as early as October they recommended the calibrated importation of 300,000 metric tons of sugar – scaled down by the Sugar Regulatory Administration (SRA) to 150,000MT – in order to address both the supply and price concerns.
Following an early and brief spike, millgate prices have already dropped by as much as 26 percent over the last 10-11 weeks, from a high of PhP3,900/bag to a low of PhP2,885, they pointed out.
Retail prices, on the other hand, have not dropped significantly from their high levels of P 95-105/kilo over the same period, they added.
Current refined sugar inventory, based on SRA data, is higher by 56.66 percent compared to the same period (September 1 – December 11) last year, due to higher refinery output and previous import balances, meaning there is adequate supply at this time to meet current needs, they said.
There is also no reason why retail prices should remain disproportionately high when millgate prices have already dropped, they added.
“We are hopeful that, despite the precipitate drop in millgate prices, producers will remain viable in the face of increasing costs of production and the challenges expected in the coming year,” they said.*