February 25 Bid Results: Lopez A =P1,516 & B =P1,580; Sagay A =P1,516 & B =P1,585; CASA a =P1,518.18 & B =P1,571.29; Passi A =P1,518.88 & B =P1,600.08; CAB a =P1,515.21 & B =1,551.91; URSUMCO A =P1,515.21 & B =P1,540; SONEDCO A =P1,516.50, B =P1,562 & molasses =P8,275.
February 18 Bid Results: Vicmico A =rejected & B=P1,723.40; BISCOM A =P1,688.58, B =P1,685 & molasses =P8,100; Sagay & Lopez A =P1,688; B =P1,724 & molasses =P8,035; Passi A =P1,692.33 & B =P1,630; & CASA A =P1,692.33 & B =P1,750.
February 11 Bid Results: Vicmico A =P1,712.30 & B =P1,880; HPCo A =P1,706, B =P1,935 & molasses =P8,120; Sagay & Lopez A =P1,712.30 & B =P1,880; BISCOM A =P1,703.88, B =P1,812.05 & molasses =P8,278; SONEDCO A =P1,670.58, B =P1,980 & molasses =P8,200.
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Domestic sugar prices have drastically dropped in the past weeks. This is incomprehensible because the country is supposedly facing a tight sugar supply situation. In fact, DTI Secretary Favila was hysterically somersaulting and crying out for importation last January.
World prices precluded the profitability of sugar smuggling. Thus, all the country’s domestic needs are sourced exclusively from domestic production. This is apparent in the substantial increase in domestic withdrawals.
As of January 24, raw sugar withdrawals spiked an astonishing 41 percent at 784,224 mt compared to only 556,443 mt last crop year. For refined sugar, withdrawals increased by 15 percent at 470,114 mt compared to 408,515 mt last crop year.
Moreover, SRA Administrator Lito Coscolluela disclosed that the industry will fall short of its initial estimated production of 2.18 million mt. The revised estimate pegs production at only 1.127 million mt.
Withdrawals have spiked. The real domestic demand is finally showing its true figure since there has been no entry of smuggled sugar into the domestic market. Moreover, production is projected to be lower than the initial estimate.
How come domestic prices plummeted?
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NFSP president Enrique D. Rojas called the attention of SRA to the problem of declining domestic prices.
“The tremendous drop in prices in so short a time despite the very tight domestic supply situation might be indicative of manipulation by some sectors who want to make a huge profit at the expense of the producers,” Rojas pointed out in his letter to Administrator Coscolluela.
NFSP’s information revealed that sugar shipments from the Visayas to various destinations in the country averaged 350,000 bags per week in October and peaked to 500,000 bags in November and December. Almost 85 percent of the volume goes to Metro Manila.
Shipments slightly dipped to 450,000 bags per week in January but they substantially decreased to an average of only 200,000 bags weekly for the first three weeks of February.
Did the country suddenly lose its appetite for sugar? How come sugar shipments from the Visayas dropped all of a sudden?
According to Rojas, the substantial decrease in shipments suggests that sufficient sugar stocks have already been positioned in Manila and major retail markets as early as December. Thus, traders now can afford not to buy additional stocks or to buy only minimal volumes at much lower prices.
Hold them if you don’t want to fold them. It’s as easy as that. However, only a very small percentage of sugar producers have the resources to hold on to their quedans and wait for a more favorable price before they sell.
The vast majority of sugar producers are marginal farmers who cultivate one hectare to less than five hectares. They do not have the funds to tide them over until the next week’s bidding. They cannot wait for better prices. At whatever price, they have to sell their quedans just to survive.
These marginal sugar producers are at the mercy of unscrupulous traders who manipulate domestic millgate prices. The consumers, too, are exploited because they still have to pay a high retail price for the sugar, even if the traders bought those stocks at low prices.
Where is DTI Secretary Favila now that sugar prices are low? What is he doing in this situation where the producers are being robbed blind by manipulative traders? What is he doing to protect the consumers who still pay for high retail prices even if millgate prices are down?
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It is disconcerting that the country’s highest tribunal will reverse itself only a couple of months after announcing that it is alright for appointed officials to continue holding on to their offices even if they have already filed their certificates of candidacy. At least the justices have the gumption to admit and reverse their error.
For Lito Coscolluela, the SC’s reversal does not matter much because he is already retiring from his SRA post. But he threw away a golden opportunity to stamp his class when he went with the flow and held on to his office after filing his certificate of candidacy last year.
What’s legal is not necessarily moral. As the SC later conceded, it was not even legal in the first place. But the sugar industry should still commend Lito for staying on. Who would have fought tooth and nails against price control if he did not stay on? Who would have courageously stood up and pushed back the government’s importation plans if Lito resigned late last year?
It’s not that the sugar industry has a dearth of leaders but it must admit that what Lito did took some balls. But he will need more than that to make a homecoming at the provincial capitol – like exiting SRA while millgate prices are favorable, for one.
(For reactions and suggestions, email bbacaoco@yahoo.com.)