Saturday, June 30, 2007 Local farmers’ group laments low prices of domestic sugar
THE price of class “B” or domestic sugar has plummeted below P1,000 per 50-kilo bag (lkg) despite the cessation of milling and, consequently, the sugar production all over the country.
This comes as a big disappointment to sugarcane farmers who expected domestic sugar prices to gradually increase during the period when sugar production has already ceased. The price of domestic sugar instead plunged to P975/lkg, down from around P1,110/lkg at the peak of milling several months ago.
Sugar farmers had been looking forward to the appreciation of domestic sugar price to offset the losses they incurred in the government-mandated class “D” or world market sugar which they have to sell at only P400/lkg, way below production cost, and to compensate for the low price of class “A” or US quota sugar which was only P800 this year compared to P1,200/lkg last year.
Jose Mari M. Miranda, president of the Cebu-based Bogo-Medellin Planters Association, blames smuggling and “technical smuggling” as the primary causes of the low prices of domestic sugar.
Not producing
“For the past two months, we have not been producing sugar. Since domestic consumption is relatively stable, domestic sugar prices should have increased due to the decrease in supply, as has traditionally happened in the past. How come prices dipped instead of appreciating?” Miranda asked.
Cheap smuggled sugar is filling the gap between the steady domestic demand and the decreased domestic supply, he said. He said a study on the sugar industry conducted more than 10 years ago projected that domestic sugar consumption for 2007 should have reached 2.4 million metric tons.
This year, sugar production is only 2.2 million metric tons but domestic sugar consumption is “supposedly” less than two million metric tons, according to the Sugar Regulatory Administration (SRA). This prompted the SRA to ship out the excess sugar production to the United States and to the world market at prices below production cost.
Miranda said the SRA’s figure of below two million metric tons for the present domestic sugar consumption is highly improbable.
He said that in crop year 1996, the Philippine sugar production of 1.8 million metric tons was not enough for the 68 million Filipinos back then, forcing the government to import.
Fertilizer prices
Now that the population has ballooned to more than 80 million, domestic demand for sugar is expected to rise as well.
To add to the sugar farmers’ woes, fertilizer prices skyrocketed from last year despite the strengthening of the peso and the relatively stable world market prices, he said.
The effect of high fuel prices also aggravates the situation, Miranda said.
“Sugar prices have plummeted while the cost of farm inputs, such as fertilizer and fuel, have skyrocketed. It is very damaging for the farmers that these two factors coincided with the rainy season which is the period for fertilizer application,” Miranda said, echoing the dismay of all sugar farmers.
“The President, through the Department of Agriculture, should address these problems. The SRA should be more pro-active in its regulatory functions while the Bureau of Customs should be more vigilant in curtailing sugar smuggling,” Miranda said. “If they cannot perform their respective mandates in protecting the sugar farmers and the Filipino consumers, we are respectfully asking the President to replace them with more competent people.” (PR)
