Domestic sugar prices still high at onset of milling season

The country’s domestic sugar was priced higher at the start of the current sugar crop year, with only four sugar milling companies operating so far.

Based on a data from the Sugar Regulatory Administration (SRA), four mills in Visayas Area already started operating for the crop year 2018 to 2019.

These are Sweet Crystals Integrated Sugar Mill Corporation, Victorias Milling Company, First Farmers Holding, Corp., and Universal Robina Corp-Sonedco. A crop year begins on September 1 and ends August 31 of the following year.

Based on the Visayas Average Bid Prices for the production week-ending September 9, the price of domestic sugar, or the so-called “B sugar,” was pegged at 11,693.33 per 50-kilo bag, which was 24.88 percent higher than the 11,356 recorded in the same period last crop year.

The latest bid price was also 5.83 percent higher than the 11,600.00 per 50-kilo bag price set on September 2.

“A sugar,” or those to be exported in the United States, will be sold at 11,159.05 per 50-kilo bag, 2.12 percent higher than the price level of 11,135.00 set last year.

Overall, the composite price was pegged higher by 31.15 percent to 11,666.62 from 11,270.80 in the same period last year.

In Metro Manila, the price of raw sugar per 50-kilo bag averages around 11,938.33 as of September 11, which is lower compared to the average price of 11,983.33 on September 4.

As for refined, the price averages at 12,558.33, which also went down from the price level of 12,633.33 during the first week of this month.

The country's sugar production for this crop year is seen to go down to 2.23 million metric tons (MT), with SRA allotting 95 percent of the output to domestic consumption and completely nothing for the world market exports.

The remaining 5 percent of the production will be tapped to meet US Quota Sugar or “A” sugar.

SRA Board Member Roland Beltran said "the order of preference right now are domestic market and US market and when there are more or excess sugar, then we allocate for the world market."

Beltran said the SRA wants to prioritize the allocation in accordance with the mandate under Executive Order No. 18 Series of 1986.

"At any rate, Section 4 of SO1 provides for periodic reassessment that gives us flexibility considering the unpredictability of the weather or climate," Beltran said.

As for the “A” sugar allocation, SRA explained that the US, a historical trading partner of the Philippines, "continues to be a reliable market and remains an instrument to stabilize domestic sugar supply that its allocation is imperative".

Last week, sugar labor groups appealed directly to President Rodrigo Duterte to ignore recommendations from his economic managers to open importation of sugar as among the measures to curb inflation as this will only benefit industrial users.

Tayo, chairman of the Negros Occidental Federation of Farmers Association, said sugar importation at this time when the milling season just started will depress sugar prices once again.

For his part, Jose Maria Montinola, a member of the VICMICO Multi Purpose Cooperative, said industrial users, such as companies likes Coke, are only "agitating" the situation in the sugar sector "because they will benefit greatly from this open importation."

"They cannot moderate their corporate greed even at the expense of robbing our government with proper revenues,” Montinola said.

This sentiment was echoed by Pedro Ogatis, manager of the Malaga-Cuenca Agrarian Reform Cooperative, Jun de la Cruz of Nacusip-TUCP, and Wennie Sancho of General Alliance of Worker’s Association, who all appealed to the President to “review closely the plans of the economic managers as this will greatly affect the sugar industry.”

“Take a second look at these recommendations,” Montinola urged, saying sugar has never been identified as a prime commodity that has caused inflation to rise.

Instead of looking at importation as the solution, Sancho said “it is better for our government to focus on stopping sugar smuggling and warn traders who are capitalizing on the situation.”