Gov’t eyes direct sugar purchases from farmers
PRICEY SWEETENER A vendor at Marikina Public Market displays bags of sugar. The price of the sweetener has remained high despite low farm-gate prices. —FILE PHOTO
The government is planning to buy sugar directly from local farmers in a bid to stabilize declining farm-gate prices, although the retail prices of sugar in Metro Manila remain high.
Sugar Regulatory Administration (SRA) chief Pablo Luis Azcona said the government was “seriously thinking about or already planning” to buy locally produced sugar at a higher price and sell the same “at a better retail price.”
“This way, we will give the farmers a better farm-gate [price]. At the same time, the consumers and the farmers as well will get a better retail price,” Azcona said in a virtual interview on Friday.
But, Azcona said, there were no plans to import more sugar as the country has enough supply.
“Based on the current demand figures, there is no apparent need to import any sugar,” he said, adding that authorities have observed a significant spread between the farm-gate price and the retail price of sugar, suggesting manipulation somewhere along the supply chain.
Sugar industry leaders have attributed the drop in farm-gate prices to P2,500 per bag and below an expected P3,000 per bag to an oversupply of imported sugar.
Prices still high
But Azcona dismissed the claim, saying, “if there is really an oversupply of sugar, its retail prices should have dropped also.”
At the same time, Azcona said producers and traders who have volunteered to provide the sugar to fill a US sugar quota allocation granted to the Philippines, so he wrote to the US Department of Agriculture to request that the Philippines be included in its sugar quota.
But based on the SRA’s monitoring as of Dec. 3, sugar prices declined by 23.48 percent to P2,486.28 per 50-kilo bag from P3,249.16 per 50-kilo bag in the same period a year ago.
Earlier, the SRA said the ideal farm-gate price of sugar should be around P3,000 per 50-kilo bag to allow retailers to sell refined sugar at P85 per kilogram. However, selling prices of sugar in Metro Manila markets remain high. According to the Department of Agriculture’s price monitoring, refined sugar is sold from as low as P75 per kg to as high as P100 per kg as of Friday.
The prevailing retail price is almost similar to the P95 per kg level recorded in the same period last year.
Gov’t intervention
The Sugar Council, comprising of three industry federations that produce more than half of national sugar output, on Tuesday reiterated their call for timely government intervention amid the drop in sugar prices.
Negros Occidental Gov. Eugenio Jose Lacson believed the government should put on hold any sugar importation in the future.
“I hope the downward trend in (millgate sugar) prices stops and starts to go up. I’m afraid many small farmers will be in the red if the prices continue to go down,” he said.
Lacson pointed out that the cost of sugar production has increased with the rise in the costs of fertilizer, labor and fuel.
“Everything is more expensive now, even labor cost,” he said.
Concerned government agencies are fleshing out the mechanics of the planned procurement. Azcona said the agency will serve as a conduit since the law prohibits the SRA from engaging in marketing and determining sugar pricing.
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