Sugar industry in trouble as fertilizer prices more than double

About 85% of cane growers are land reform beneficiaries and may not be able to handle soaring production costs, especially in typhoon-hit southern Negros.

Sugar producers are losing revenue due to rising fertilizer and oil costs, former Sugar Regulatory Authority (SRA) board member Dino Yulo said on Friday (January 28th).

The steep rise in production costs in the sugar industry, he said, will have a huge impact on Negros Occidental, which remains largely a monoculture economy.

Yulo, in a press release, said the price of urea, the fertilizer used by farmers, jumped 255% in a year and a half. A 50 kilo (LKg) bag sold for 900 pesos 18 months ago now costs 2,300 to 2,400 pesos per bag, he pointed out.

Producers also face high oil costs. “Rising oil prices have also almost doubled, with diesel fuel topping the P50 per liter mark,” Yulo said.

The sugar cane farms of Negros Occidental represent 53% of the 423,333 hectares used by the industry nationwide.

The province accounts for more than half of the 90 billion pesos that the sugar industry contributes each year to the national economy.

Calls ignored

Yulo warned that price hikes of two main agricultural inputs will have a “serious impact” on the sugar industry.

Higher production costs are already reflected in local sugar prices.

The SRA demand and supply chart shows the price of raw sugar at the factory site on January 16 at 1,924.62 pesos per KG compared to 1,488.82 pesos on the same day in 2021 .

The wholesale price of raw sugar per KG is 1,950 pesos against 1,700 pesos in 2021, an increase of 14.71%.

Washed sugar now sells at P2,100/Kg against P1,800 in 2021, an increase of 16.67%.

Refined sugar has an even higher price jump, at 25.58%, from P2,150/Kg in 2001 to P2,700 this year. Its retail price per kilo fell from 50 pesos in January 2021 to 54.50 pesos in January 2022.

Sugar industry leaders called for nationwide intervention several months ago but, “so far there has been no concrete action from the Ministry of Agriculture and the Ministry of Trade and of Industry,” Yulo said.

“Since September there have been calls for fertilizer subsidies and a price cap for this particular product, but our call has not been followed,” he added.

The call is now very urgent, Yulo pointed out, as the harvest season has already peaked and the planting season has started in several regions.

Unless the prices of the two main agricultural inputs fall, these factors would weigh more heavily on a province that is still struggling to recover from the effects of Typhoon Odette.

Yulo noted that Odette, which slammed into South Negros on Dec. 16, 2021, damaged or destroyed numerous farm structures, including the homes of field workers. It also led to the temporary shutdown of a sugar refinery.

“Our growers in the south may not be able to survive this crisis if DTI does not step in and ensure fertilizer costs are kept under control,” Yulo said.

The SRA Roadmap 2020 notes that 26,188 farmer-owners cultivate 212,627 hectares of sugarcane plantations in the province.

Governor Eugenio Jose “Bong” Lacson has declared that 85% of sugarcane farmers are beneficiaries of land reform. Many depend on farmers’ federations to secure better milling contracts and to negotiate farm inputs and trade. – Rappler.com

Rachel J. Bradford