The Confederation of Sugar Producers Association (CONFED) is calling on President Ferdinand Marcos Jr. to implement a government-financed buying program to arrest the problem of plummeting millgate sugar prices.
On top of the announced no sugar importation until December 2026, concrete measures are needed to raise domestic sugar and molasses prices, reduce local sugar inventory, and establish a clear and predictable policy environment to restore confidence in the domestic sugar industry as a major economic driver, CONFED president Aurelio Gerardo Valderrama Jr. said in his letter to the president, which was released to the media on Wednesday, January 7.
“The sugar industry is in crisis. Precipitous price drops, reduced sugar yields, and soft demand for domestic sugar are leaving farmers and millers financially distressed, sugar refineries underutilized, and sugar workers facing the prospects of drastic work reductions,” Valderrama said.
Valderrama said the labor sector is already itching to take to the streets if no action is taken.
“Unfortunately, urgent and concrete solutions are yet to fall in place,” he said.
The Sugar Regulatory Administration (SRA) has cited its stakeholders’ lack of a unified stand to justify the “delay” in instituting needed solutions, he said.
The reality, however, is that its proposed Sugar Order No. 2, Series of 2025-2026, and behind it, a supposed “4:1:3” incentive scheme (buy 4, export 1, and import 3), has not gained support from the majority of stakeholders, many of whom have outrightly rejected it or have formally raised questions that await clear, logical, and convincing answers, Valderrama said.
CONFED appreciates the government’s announcement to stop all further sugar importations until December 2026, and its earlier plan to regulate molasses imports, Valderrama said.
But it is only part of the solutions the industry needs, he said.
Valderrama said CONFED proposes the following as an alternative to the proposed SO No. 2:
*GOVERNMENT-FINANCED BUYING PROGRAM – Purchase domestic raw sugar at a minimum of ₱2,300/lkg, to be refined by local refiners and sold wholesale for the consumer market at profitable but lower-than-prevailing prices. This is not a subsidy program. It will enable the government to recover its “investment,” improve millgate buying prices, reduce retail prices for consumers, and allow local refining operations to recover. It will establish fair prices for all, he said.
*RESERVE PROGRAM – Hold all remaining imported refined sugar not yet reclassified into “B” until a predefined trigger point provides a basis for its release to end-users. An alternative is to tie up the release of said sugar with a matching domestic refined purchase on a 1:1 ratio. This can help limit the volume of imported sugar available for end-users and improve the market for domestic refined, Valderrama added.
*MOLASSES PROGRAM – As previously proposed, convene the National Biofuel Board (NBB) to resolve regulatory issues and rationalize/stabilize the molasses market.
*SUGAR IMPORTATION POLICY – Define a clear, data-supported, transparent and predictable policy environment that will establish guidelines for determination of volume, timing and mechanics of future sugar importation programs. Confed has called for this many times before and has offered to assist in formulating such guidelines, Valderrama said.
*TECHNICAL WORKING GROUP – The details regarding funding requirements, sources and implementing mechanics of the proposed government-financed sugar buying program are best threshed out by a TWG (Technical Working Group) tasked to formulate a doable program at the earliest possible time. Confed urges government to include industry stakeholders in the TWG.
“We are not giving up. We cannot give up and surrender our fate to the negative consequences of government policy, even if well-intentioned. We ask government to make room for serious discussion of urgent solutions while a longer-term policy framework is fleshed out,” Valderrama said.
“The fate of an entire industry now rests on the shoulders of government and the industry’s own leaders. It is time to work together or expire separately,” he said.*
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