Bitter pill for the sugar industry
Last week, the Sugar Regulatory Administration issued an order allowing 200,000 metric tons of refined sugar to enter the Philippines, a controversial move that sugar growers described as “appalling” and “highly untimely” given that shipments will begin to arrive. at the height of the sugar season.
“The very agency that is supposed to protect us seems determined to kill the industry,” lamented Manuel Lamata, president of the United Sugar Growers Federation (Unifed), one of the largest sugar planters federations in the country. .
The SRA, however, justified the import by citing the shortfall in local sugar production following the devastation wrought by Super Typhoon ‘Odette’ late last year on sugar-producing provinces and the urgent need for control market prices which have reached record levels.
SRA data showed that as of January 23, the wholesale price of refined sugar in the National Capital Region had climbed to 2,900 pesos per 50-kilogram bag, from 2,150 pesos in the same period last year. last year. This resulted in a 14% increase in the retail price of the main staple to 57 pesos per kilogram from 50 pesos last year.
And with the SRA forecasting a ‘very tight’ supply of sugar which ‘will not be sufficient’ to cover the growing demand for sugar in the two to three months between milling seasons, the pressure is on for sugar prices to are still increasing.
According to revised figures from the SRA, raw sugar production for the 2021-2022 crop year ending in August will reach 2.072 million metric tonnes, down from the initial estimate of 2.099 metric tonnes before Odette, which caused some 1.15 billion pesos in damage to sugarcane crops. , stocks of sugar in warehouses and facilities and equipment of sugar mills and refineries in the main sugar districts.
The Philippine Sugar Refineries Association also cut its refined sugar production forecast for the 2021-2022 crop year to 16.748 million 50-kilogram bags, down from the previous production estimate of 17.572 million bags. of 50 kilograms before Odette – the strongest typhoon to hit the country. in 2021 – hit the central and southern Philippines in December.
“As the economy begins to open up again, the demand for raw sugar and refined sugar for January this year has also increased compared to the same month in the previous three years,” said SRA Administrator Hermenegildo Serafica, “hence the need to increase sugar stocks to ensure food security and the availability of sugar to cover the demand for sugar until the next agricultural campaign or the next milling season starts again.
While Unifed has acknowledged the projection from industry stakeholders that there will be a shortage of sugar due to low production in the sugar lands, particularly in the Negros region which accounts for more than half of the total production in the country, former SRA board member Dino Yulo said the volume was “far too much”.
Then there is the question of who will really benefit from the sugar import program.
For Yulo, it is not small sellers who will benefit from added sugar, but rather large-scale industrial users, including manufacturers of cookies, breads, candy and confectionery, and beverages, who have received half. of the import quota.
“We are still in the midst of a crisis, and our sugar cane planters in southern Negros are still trying to recover from the effects of Odette, and here comes another crisis that is going to hit us,” Yulo said.
Lamata also squarely countered the SRA’s argument about rising prices, saying the SRA has been blind to the real forces driving up retail and wholesale prices.
The desire to earn a handsome profit is not one of them. On the contrary, Lamata said the margins only covered the escalating production costs.
“They only see the rising cost of sugar in the market, but they don’t recognize the forces driving those prices up, and a lot of that can be attributed to fertilizers that nearly tripled its cost and fuel that broke through the P50 per liter mark,” says Lamata.
“No matter what increase in sugar prices we see in the market, we have to pay the high cost of agricultural inputs,” added Lamata, who said the group had asked trade ministries as early as last year. and Industry and Agriculture to cap the cost of fertilizer, a key input in sugar production.
Given these elements, there are clearly other factors that the SRA should consider besides sugar production levels and market prices in pursuing its import program.
It would indeed be better to fulfill its mandate to the people by heeding the call of the sugar planters to “get a good picture of the land” so that the program produces the expected results and does not become another bitter pill for the people. local sugar industry battered. swallow.
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