Sugar regulator eyes ‘scenario’ building in drop of farm-gate sugar price
INQUIRER FILE PHOTO
MANILA, Philippines — The Sugar Regulatory Administration (SRA) is looking into the decline in farm-gate prices of sugar amid the projected growth in domestic production.
Without disclosing any names or entities, SRA Administrator Pablo Luis Azcona said the agency suspected irregularities in transactions.
“Someone is making a scenario and definitely we will not take this sitting down,” he said.
Azcona said the SRA would focus its investigation on “the mills, traders, and importers to see if there is some abnormality in their dealings.”
The SRA is not ruling out the possibility of trade manipulation. Azcona said they were surprised that farm-gate prices dropped last week, particularly in Negros Occidental where prices declined to a low P2,550 to P2,700 with only two mills reporting trading at P3,000 at least.
“We have been pushing for the P3,000 price as I feel it is the fair market price and this has been echoed by the administration as well as an incentive for farmers to plant more and be more sustainable,” Azcona said.
Global developments
“Since February, we have maintained prices at a comfortable level of P3,000 which is equivalent to P60 per kilogram at farm-gate raw price and P85 per kg refined in retail price in Metro Manila,” he added.
Azcona said the recent developments in the global market are expected to improve farm-gate prices of sugar.
For instance, sugar output in Thailand is projected to decline by 30 percent, which the SRA chief said “will be their lowest in the last 10 years.”
This scenario, said Azcona, will prompt good prices for local sugar “especially with India also declaring that they will not be exporting sugar this year but may need to import close to a million tons for their needs.”
Azcona also said Brazil, one of the world’s largest sugar-producing countries, declared that while they hope to maintain or increase their production this year as compared to last, “Brazil may put any excess sugar they have for fuel use or for energy.”
“The global situation is a clear indicator that we cannot kill the local industry and be import dependent, as the world production continues to decline. Let us put more effort into supply security through self-sufficiency and not import dependence,” he added.
The SRA is projecting raw sugar output to reach 1.85 million metric tons (MT) for the crop year 2023 to 2024, which began on Sept. 1 and will end on Aug. 31, 2024 — lower than the raw sugar withdrawal estimated at more or less 2.20 million MT.
Depending on the severity of the El Niño phenomenon, Azcona said earlier the domestic production may slightly increase or decrease by 10 to 15 percent.
For the current crop year, the SRA is allocating the entire sugar output to “B” or the domestic market to stabilize supply.
