‘STOP THE DECLINE’ | Sugar Council urges concerted action to address sugar issues

‘STOP THE DECLINE’ | Sugar Council urges concerted action to address sugar issues

The Sugar Council, represented by three federations comprising more than half of national sugar output, reiterated their call for timely government intervention as well as united action to address urgent critical issues faced by the industry.

“We urgently appeal to Pres. Ferdinand Marcos, Jr., through Agriculture Sec. Francisco Tiu Laurel, Jr. and Sugar Regulatory Administrator Pablo Luis Azcona, to adopt measures to stop the decline in farmgate sugar prices and bring retail prices to more reasonable levels, even as the industry continues to seek ways to remain viable in the face of adversity,” said the Sugar Council in a press release on Tuesday, December 19.

The Sugar Council is composed of the Confederation of Sugar Producers’ Associations, Inc. (Confed), the National Federation of Sugarcane Planters (NFSP), and the Panay Federation of Sugarcane Farmers (PanayFed), led respectively by their presidents, Aurelio Gerardo Valderrama, Jr., Enrique Rojas, and Danilo Abelita, respectively.

SRA records, the Council noted, showed that millgate raw sugar prices per 50-kilo bag dropped from an earlier average high of P2,825 per bag in Week Ending (WE) September 10, 2023 to an average of P2,552 (WE, Oct. 10) and P2,564 (WE, Nov.19).

In comparison, the Council recalled that millgate prices for Week Ending November 20, 2022 averaged Php 3,380.56 per bag.

“With production and labor costs on the rise, farmers are hard-pressed to remain viable at today’s low millgate prices,” the Sugar Council opined.

Despite the price decline, however, the group pointed out that prevailing retail sugar prices have remained high at P80/kilo for raw and P100/kilo for refined, which the Council said benefits neither farmers nor consumers.

Prioritize subsidized imports

SRA records, according to the Council, reflected that more imported refined sugar is being withdrawn from warehouses compared to locally-refined sugar, indicating that traders give priority to cheaper imports – often referred to as sugar subsidized by their host countries – which brings them more profit in the retail market.

The Council pointed out that SRA’s Sugar Supply and Demand Situation report as of November 19, 2023 showed that out of 232,279 metric tons of refined sugar withdrawals, only 33 percent (76,254 mt) were locally refined while the huge majority of 67% (156,025 mt) consisted of imported refined sugar.

This almost 70:30 ratio between imported and locally-refined sugar withdrawals has consequently dampened demand for domestically-produced sugar, as the Council noted that about 40% of domestic sugar consumption is normally converted to refined sugar for the consumption of food processors and industrial users.

“When there is weak demand for local refined sugar brought about by the abundance of cheaper imported sugar,” the group stressed, “it leads to weakened demand for raw sugar, which ultimately results in low millgate sugar prices.”

Recommendations

Moving forward, the Sugar Council strongly recommended that government exert its best efforts to maintain a balanced supply: demand situation – consistent with the mandate of the Sugar Regulatory Administration “to establish and maintain such balanced relation between production and requirement of sugar and such marketing conditions as will ensure stabilized prices at a level reasonably profitable to the producers and fair to consumers”, and more particularly, to better manage sugar importations in the future, while producers and millers continue to seek ways to improve their productivity levels.

Consistent with their previous position, the Sugar Council pushed for the crafting of a transparent and rationally-calibrated importation program based on historical numbers and current market movements, and that the importation program should be a result of consultation with all stakeholders of the industry. 

The group reiterated that calibrated importation, in terms of timing and volume, should not happen during the milling season, and only in volumes – including buffer stock -needed to meet market requirements between the end of the preceding milling season and the start of the succeeding milling season.

The Council also called on all stakeholders to work together with government policy makers and regulators to enhance the long-term viability of the industry, which it said collectively remains a significant contributor to the national economy.

“The survival of the industry,” the Council stressed, “rests on our ability to jointly adopt measures that ensure the viability of all its stakeholders, especially the small farmers. Towards this end, the Sugar Council seeks earnest and genuine solution-seeking dialogue with government and other stakeholders at the earliest possible time.”*

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