July 14, 2022

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No sugar shortage, industry says; high prices blamed on ‘hoarding’

SUGAR producers said on Thursday that the supply of sugar is ample and blamed the prevailing high prices on “manipulation and hoarding.” 

United Sugar Producers Federation President Manuel R. Lamata blamed the manipulation on some traders he did not identify.

“Definitely, there is manipulation and hoarding going on,” Mr. Lamata said in a Viber message.

The average retail price of refined sugar in wet markets was P87.50 per kilo on July 8, according to a report by the Department of Agriculture (DA). The price was as high as P90 in some markets.

The average price of raw sugar in wet markets, meanwhile, was P66.86 per kilo.

Mr. Lamata projects a possible shortage “in the long run.”

Philippine Chamber of Commerce and Industry President George T. Barcelon said the increase in sugar prices is the result of various factors, including surging prices of fertilizer and the impact of previous typhoons on sugar-producing provinces.

“(We should) consider the devastation that was brought about by Typhoon Odette in mid-2021, which hit the Visayas and Northern Mindanao, where sugar is grown extensively,” he said in a Viber message. “This affected production for the first half of 2022.”

“There is limited supply coupled with high cost of fertilizers. Farmers fertilized less of their farms, thus affecting productivity,” he said. “That is what is happening now.”

He noted that the DA’s plan to import 500,000 metric tons of sugar did not materialize, affecting supply.

“So, I think, only 200,000 metric tons was allowed for import and this was fully absorbed by industrial users,” he said. “No imports reached the retail side; thus, high prices are now being felt.”

Mr. Barcelon said the “only recourse” now for the short term is to import from Thailand and other Southeast Asian countries.

Mr. Lamata, who said the greed of some sugar traders triggered surging prices, urged the government to impose a suggested retail price of P60 per kilo of raw/brown sugar and P75 for refined sugar.

He said traders should “immediately” import 100,000 metric tons of refined sugar and “bring the imports to the DA and Sugar Regulatory Administration’s rolling stores with suggested retail prices and sell them directly to (consumers) and bakers.”

“(The government) should ensure that it will be exclusive to the palengke (wet markets) and housewives, not to the industrials and bottlers.”

Negros Oriental is one of the Philippines’ largest sugar producers. Its Vice Governor Jeffrey P. Ferrer said he will consult with sugar refineries to gauge their willingness to “restart their operations as soon as possible” ahead of a possible shortage.

“There have been reports that low sugar stocks are due to hoarding, but this is an allegation that needs to be verified first,” he said in a statement. “On the other hand, if indeed true, I will reach out to various refineries in the province if they are willing to open their mills to refine raw sugar in order to address the perceived shortage in the market.”

Mr. Ferrer said while some officials, including those that will serve under the Department of Agriculture, have yet to be named by President Ferdinand R. Marcos, Jr., “we have to hit the ground running and prepare for the coming crop year by ensuring that we will have sufficient sugar supply in the coming months.” — Kyle Aristophere T. Atienza