MARCH 11 & 12 Bid Results: Vicmico – failed bidding; Hawaiian B=P1,785 & molasses=P8,480; Passi A=P1,185.10 & B=P1,900;
Sonedco B=P1,658 & molasses=P8,482; First Farmers B=P1,825 & molasses=P8,500CAB A=P1,180 & B=P1,752.81; Ursumco A=P1,180 & B=P1,645.41; La Carlota A=P1,185, B=P1,775 & molasses=P8,500.
March 4 Bid Results: HPCo molasses=P8,380; Vicmico B=P1,630.25; Lopez A=P1,465.65, B=P1,630 & molasses=P8,470; Sagay A=P1,466, B=P1,630 & molasses=P8,470; Biscom A=P1,465.65, B=P1,635.95 & molasses=P8,519.
First Farmers molasses=P8,300; Sonedco A=P 1,467, B=P1,636 & molasses=P8,555; CAB A=P1,452.68 & B=P1,652.32; Ursumco A=P1,452.68 & B=P1,638.19; Passi & CASA A=P1,465.88 & B=P1,705.68.
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Sugar prices in last week’s bidding slightly improved. This is good news for producers who were shaken by the drop in prices last February. Hopefully, with the milling season winding down, the tightening supplies will prop up sugar prices.
BISCOM and La Carlota have already stopped milling. Bukidnon mills and other mills in the country are expected to wrap up operations by next month. Perhaps by May, only Lopez, Vicmico and Hawaiian will still be milling. Thus, prices should be favorable until the end of the milling season.
As mentioned in last Friday’s column, raw sugar production for this crop year is expected to drop. SRA initially projected that raw sugar production for Crop Year 2009-2010 will reach 2.18 million metric tons. During the meeting of the Sugar Alliance of the Philippines last week, SRA presented its revised estimate of only 2.11 million mt.
Cane Points compared the initial estimate with the revised projection. There is no change in the number of hectares devoted to sugarcane but there was a glaring drop in the expected harvest in terms of gross tonnage of canes.
In the Visayas, total tons cane is projected to drop by 635,000 mt to 14.21 million mt from the previous estimate of 14.85 million mt. In Luzon and Mindanao, total cane tonnage was also adjusted from 7.83 million mt to only 7.32 million mt. This represents a decrease of more than 500,000 mt.
In terms of raw sugar production, Visayas output is expected to drop from 1.42 million mt to only 1.4 million mt while Luzon and Mindanao raw sugar production is also projected to drop from 760,000 mt to only 717,162 mt.
According to National Federation of Sugarcane Planters (NFSP) president Enrique D. Rojas, the decrease in tons cane can be attributed to too much rain during the start of the crop year followed by the prolonged dry weather conditions brought about by El Niño.
Rojas is not sure that the sugar industry’s output for this crop year can reach the revised raw sugar production estimate recently released by SRA. He believes that the revised estimate of 2.11 million mt is an optimistic projection but it is doubtful if it can be achieved.
He cited reports of declining productivity from NFSP members all over the country as well as his personal observation on the sugarcane farms in Negros as the reason behind his doubts.
As early as December, there have been reports from producers in central Negros that their farms produce barely 60 tons cane per hectare. Traditionally, these farms average between 70 to 80 tons cane per hectare. And these are large farms with sufficient resources.
If these well-nurtured farms experience a decline in productivity, then it will be safe to say that other smaller farms with lesser financial support will also be badly hit. And if the fertile Negros farms are affected, how much more for farms in other parts of the country which produce at best only 40 to 50 tons cane per hectare?
Rojas stated that the sugar industry will be lucky if production for Crop Year 2009-2010 can surpass 2 million metric tons. At this level, the supply will be just enough for domestic consumption with very little, if any, left as buffer stock for the next crop year.
Again, this tightness in supply should translate to favorable sugar prices.
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In previous columns, I lamented the fact that government has no long-term and sustainable program for the development of the country’s agricultural sector. It appears that the government is hell-bent on relying on imports to feed its people.
A friend texted me and stated that I was right in saying that government does not want to support the agricultural sector because it wants to rely on importation. She told me about a news story in TV Patrol where a rice importer exposed the shenanigans of government agencies in importation transactions.
According to this importer, there are lots of kickbacks from rice imports. The minimum was US$20 per metric ton but it can go as high as US$80 to US$100 per metric ton. Naturally, the importer passes on this cost to the trader and retailer who in turn pass it on to the hapless consumer.
At the minimum of US$20 per mt, this translates to an add-on of P1 per kilo in the retail price of rice. At US$80 per mt, it means the consumer has to pay an additional P4 per kilo of rice to absorb the cost of the government kickbacks.
He stated that this is the main reason why the country speeded up its rice importation last year purportedly to secure the rice requirements for this year. It was not so much for food security but for fund-raising purposes. Money-money lang, walang personalan.
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