CANE POINTS: Why are sugar prices so low?

Yesterday (November 22), sugarcane farmers were distressed after learning that the bidding at Hawaiian yielded a price of only P2,610 per 50-kilo bag.

Hawaiian’s bid price is the barometer for sugar prices during biddings conducted the following day in other mills. Sugar prices for that week often turn out P100 or so, higher or lower, than Hawaiian’s price.

Yesterday’s Hawaiian price is the second lowest since the milling season started. Its lowest so far is P2,500 per bag on Week Ending October 13. At that time, six mills reported prices ranging from P2,515 to P2,520, while prices at Vicmico and URC-Passi were P2,640 and P2,710, respectively.

With Hawaiian’s price yesterday at only P2,610, farmers expect a high of P2,800 per bag in other mills this week. Definitely lower than the promised P3,000 per bag minimum.

Since the first bidding this crop year, only Hawaiian and First Farmers reported prices barely above P3,000 per bag, and only on two occasions (September 15 and September 22 at an average price of P3,041 and P3,005, respectively).

Other than those two instances, sugar prices failed to breach the P3,000 mark.
SRA failed to deliver on its promise.

Why are sugar prices so low?

“The traders know what exactly is the right price. But right now we are affected somewhat by a lot of imported refined sugar,” said Atty. Dan Pedrosa, Manager and Corporate Secretary of VIMACA Farmers Association.

“What happened is, this year, there are a lot of imported sugar… so by the start of new milling season this September, the inventory is really high. Right now at the start of milling season, there were about 10 million bags of refined sugar with an additional two million coming in,” said Pedrosa, as quoted last Friday (October 13) in a report by a national media outlet.

“So you can just imagine how it’s going to affect [prices] because there’s an over-importation of refined sugar and it has also affected the cost of the raw [sugar],” the report further quoted Pedrosa.

Pedrosa issued this statement more than a month ago but, based on the millgate prices of sugar until now, apparently the statement still holds true.

Over-importation, then, is the culprit. And every sugarcane farmer worth his sweetener knows what government agency approved all these sugar importations.* (Butch Bacaoco)