The Sugar Council, represented by three federations comprising more than half of the national sugar output, on Tuesday, Dec. 19, reiterated their call for timely government intervention as well as united action to address urgent critical issues faced by the sugar industry.
“We urgently appeal to President Ferdinand Marcos Jr., through Agriculture Secretary Francisco Tiu Laurel Jr. and Sugar Regulatory Administrator Pablo Luis S. Azcona, to adopt measures to stop the decline in farmgate sugar prices and bring retail prices to more reasonable levels, even as the industry continues to seek ways to remain viable in the face of adversity,” the Sugar Council said in a press statement.
The Sugar Council is composed of the Confederation of Sugar Producers’ Associations Inc. led by Aurelio Gerardo J. Valderrama Jr., National Federation of Sugarcane Planters headed by Enrique D. Rojas, and the Panay Federation of Sugarcane Farmers led by Danilo A. Abelita.
SRA records for 2023 show that millgate raw sugar prices per 50-kilo bag dropped from an earlier average high of P2,825 per bag in week ending (WE) September 10 to an average of P2,552 (WE Oct. 10) and P2,564 (WE Nov.19), the Council said.
In 2022 the millgate prices for Week Ending November 20, averaged P3,380.56 per bag, it said.
“With production and labor costs on the rise, farmers are hard-pressed to remain viable at today’s low millgate prices,” the Sugar Council said.
Despite the price decline, however, the group pointed out that prevailing retail sugar prices have remained high at P80/kilo for raw and P100/kilo for refined, which the Council said benefits neither farmers nor consumers.
SUBSIDIZED IMPORTS
SRA records show that more imported refined sugar is being withdrawn from warehouses compared to locally-refined sugar, indicating that traders are giving priority to cheaper imports – often referred to as sugar subsidized by their host countries – which brings them more profit in the retail market, the Council said.
The Council pointed out that SRA’s Sugar Supply and Demand Situation report as of November 19 shows that out of 232,279 metric tons of refined sugar withdrawals, only 33 percent (76,254 mt) were locally refined while the huge majority of 67 percent (156,025 mt) consisted of imported refined sugar.
This almost 70:30 ratio between imported and locally-refined sugar withdrawals has consequently dampened demand for domestically-produced sugar, the Council said, noting that about 40 percent of domestic sugar consumption is normally converted to refined sugar for the consumption of food processors and industrial users.
“When there is weak demand for local refined sugar brought about by the abundance of cheaper imported sugar it leads to weakened demand for raw sugar, which ultimately results to low millgate sugar prices”, the Council said.
RECOMMENDATIONS
The Sugar Council said it strongly recommends that government exert its best efforts to maintain a balanced supply:demand situation – consistent with the mandate of the Sugar Regulatory Administration.
Government should also better manage sugar importations in the future, while producers and millers continue to seek ways to improve their productivity levels, it added.
Sugar Council reiterated its push for a transparent and rationally-calibrated importation program based on historical numbers and current market movements.
The importation program should be a result of consultation with all stakeholders of the industry, it said.
Calibrated importation, in terms of timing and volume, should not happen during the milling season, and only in volumes – including buffer stock -needed to meet market requirements between the end of the preceding milling season and the start of the succeeding milling season, it added.
CALL FOR UNITY
The Council called on all stakeholders to work together with government policy makers and regulators to enhance the long-term viability of the industry, which remains a significant contributor to the national economy.
“The survival of the industry rests on our ability to jointly adopt measures that ensure the viability of all its stakeholders, especially the small farmers. Towards this end, the Sugar Council seeks and earnest and genuine solution-seeking dialog with government and other stakeholders at the earliest possible time”, it said.*