The Sugar Regulatory Administration remains optimistic that there will be better millgate prices for the country’s sugar farmers with the world market trend showing a drop in production in big sugar producing countries, SRA Administrator Pablo Azcona said Tuesday, September 19.
“We continue to be positive of growth in the sugar industry and at the moment, we are moving to ensure stable farmgate prices as this has shown a net increase in sugar planted areas because of last year’s good prices,” Azcona said, adding that, “ barring any severe El Niño, we may have the same or slightly better produce this year”.
“The global situation is a clear indicator that we cannot kill the local industry and be import dependent, as the world production continues to decline,” he said.
He stressed the need to put more effort into supply security through self-sufficiency and not import dependence.
“This administration clearly understands the need for sustainable local production, as well as a great effort towards production improvement through modernization, mechanization, research, and consolidation,” he said.
Azcona, who recently attended an international sugar conference in Thailand, said he was informed by Rangsit Hiangrat, director of Thai Sugar Millers Corp., that “Thailand will have a 30 percent drop in production which will be their lowest in the last 10 years.”
This will prompt good prices for local sugar “especially with India also declaring that they will not be exporting sugar this year but may need to import close to a million tons for their needs”, he said
“These two big sugar exporters alone have driven world market prices up which is why it was surprising that our local farmgate price dropped last week”, Azcona said.
They are looking into the possibility of trade manipulation, he said.
Azcona was reacting to reports that local trading in Negros Occidental last week dropped to a low of P2,550 to P2,700 with only two mills reporting trading at P3,000 at least.
“Since February we have maintained prices at a comfortable level of P3,000 which is equivalent to P60/kilogram at farmgate raw price and P85/kilogram refined in retail price in Metro Manila. We have been pushing for the P3,000 price as I feel it is the fair market price and this has been echoed by the administration as well as an incentive for farmers to plant more and be more sustainable,” Azcona reiterated.
SRA suspects that “someone is making a scenario and definitely we will not take this sitting down”, he said.
Brazil, among the biggest sugar producing countries in the world has also declared that while they hope to maintain or increase their production this year as compared to last, “Brazil may put any excess sugar they have for fuel use or for energy,” Azcona added.*