Featured Video
Adobe Flash Player not installed or older than 9.0.115!
| RP AWASH WITH SUGAR |
 |
 |
 |
| Monday, 08 February 2010 19:54 |
 THE country has enough sugar supply until the next lean months. In fact, with the milling season still ongoing, the Philippines can even export the commodity. So why is the price of sugar rising and why did the government import 150,000 metric tons of the sweetener?The Sugar Regulatory Administration said available sugar supply can last until September, the beginning of the next crop season. Lean months start from September and last until August next year. Since the country is still in the peak of the milling season which started last December, production is very high. Almost all of the 30 sugar mills and refineries are in operation, an indication of good harvest. As of January 24, the production of raw or brown sugar hit 1,178,156.77 metric tons, and 423,836.59 MT for refined sugar. Add to this the 150,000 metric tons recently imported by the government, which has to be distributed to the market at once. And yet despite this overabundance, there have been persistent warnings of a looming shortage. Sugar prices have gone up to P60 per kilo in some areas, fueling fears that the commodity may slowly vanish from store shelves. The SRA blame rising prices on the world market, which it says is facing a sugar shortage. Extreme weather conditions are also in play, since a drought in India and excess rainfall in Brazil cut sugar cane production in the two major sugar producers. The shortfall pushed sugar prices up to unprecedented levels, affecting local prices. The international price of raw sugar hit 23 cents a pound late last year, compared to 11.8 US cents a year earlier. Rosemarie Gumera, SRA spokesman, explained that local prices also have to be adjusted since a large gap between local and the world market would prompt local producers to smuggle their products out and sell them to other countries where they will have bigger profit. Thus, even if the Philippines has enough sugar, a global pinch will affect local prices. Already, the government has raised suggested retail price to P54 a kilo, up from P52 a week ago. Sugar sold by the National Food Authority costs P48 a kilo. Even when there’s a surfeit of sugar, prices can’t be lowered, Gumera said. “Wala na silang motivation na magtanim dahil masyadong mura kaya ang mangyayari ay kukulangin tayo sa production. Ngayon medyo ganado ang ating mga farmers dahil maganda-ganda ang kita, kaya meron tayong maraming supply.” Gumera admitted that the agency is being hounded by queries about rising sugar prices when there is no shortage yet. She also admitted that there has been a miscalculation behind the importation of 150,000 MT of sugar. She said the shipment arrived early. Two militant solons objected to the sugar importation since there is no shortage. Gabriela Rep. Luz Ilagan filed two separate resolutions — one calling on Congress to conduct an inquiry into the reported sugar shortage and another to look into the possible manipulation of prices by the sugar cartels. On the other hand, Anakpawis Rep. Rafael Mariano warned that the importation of sugar will affect the local sugar industry. Ilagan said the SRA should explain to the public why sugar prices have gone up. “There was no substantial basis for the declaration of shortage, since the supply is equal to and sometimes in excess of the demand,” she said. The solon said farmers in the Visayas told her there was an adequate supply of sugar. About 60 percent of sugar supply comes from provinces in the Visayas region. “In the midst of worldwide shortage in sugar supply, the SRA even called for creation of C-1 strategic reserve classification to take advantage of possible export opportunities of Philippine sugar if local supply and demand conditions allow for the export of any excess,” Ilagan said. “The domestic price of sugar should not reflect that of the world market,” she added. Sugar cartel?
Ilagan suspects that price hikes may have been manipulated by sugar cartels. “They could have intentionally cornered the supply of sugar to artificially induce high prices,” the solon said. She said the sudden price increase could be the handiwork of sugar cartels who may have hoarded supply to create an artificial shortage. Ilagan called on law enforcers, especially the National Bureau of Investigation, to determine if there has been hoarding of sugar. She slammed the Department of Trade and Industry and the SRA for their failure to protect consumers from the unscrupulous traders and to regulate sugar prices. Meanwhile, Mariano said importing sugar will weaken the local industry and affect millions of farm workers. According to him, the country’s annual production of 2.0 to 2.5 million metric tons of sugar is more than enough to ensure an ample supply. He called on government to implement price control and mechanisms to ensure that prices will not be unreasonable. |