A labor leader is calling for an investigation to allay fears of sugar price manipulation amid over supply speculation and a decrease in farmgate prices.
“Somebody is gaming the market” in the sugar industry, Wennie Sancho, Save the Sugar Industry Movement (SAVE-SIM) convenor, said Wednesday, Nov, 20.
“Gaming” the market in the sugar industry allegedly refers to unethical practices that manipulate prices, and supply and demand to gain an unfair advantage, he said.
“The winners are the large sugar traders and middlemen. They manipulate prices, control supply and profit from supply difference,” Sancho said.
He also said unscrupulous producers, importers benefit from artificially low millgate prices, exploiting small farmers and consumers.
Influential industry players are using political connections or market dominance to influence policies and prices, while cartels, syndicates, collude to control prices, limit competition and maximize profit, Sancho said.
The losers are the marginal sugar farmers, the agrarian reform beneficiaries, who receive low farmgate prices, struggle to cover cost and risk bankruptcy, he said.
Consumers also face higher prices, reduced quality or limited access to sugar products, he added.
Honest producers struggle to compete with manipulated prices potentially leading to business closure, Sancho said.
The local economy will suffer from reduced revenue, employment, economic growth. Government losses revenue from taxes due to manipulated pricing, he added.
Under the “game”, the order of the day would be price fixing, supply hoarding, artificial demand creation, disinformation, and import-export manipulation Sancho said.
“The consequences are distorted market prices, reduced competition, inefficient allocation of resources. Decreased investors confidence and negative impact on economic growth.” he said.
There are manipulations gaming the market to create artificial shortage of sugar at a time when the demand is high during the Christmas season, he said.
“Efforts should continue to combat sugar smuggling and price manipulations. Advocacy and public pressure can help ensure accountability… We must save Negros and the sugar industry, the lifeblood of our economy,” he added.*