CANE POINTS: Sugar farmers bewail low prices

Negros Occidental 5th District Representative Dino Yulo is a man of his word. His constituents in the 5th District can attest to this. When Cong Dino speaks, he means what he says and he delivers on his word.

This time, however, the former planters representative to the Sugar Regulatory Administration Board is not happy at all that his words came true.

Last month, Cong Dino expressed apprehension that sugar prices this milling season might not reach last crop year’s prices, which ranged from a low of P2,866 per bag in October 30 to a high of P3,798 in October 2, because the country still has a huge stock balance.

Though he did not specifically mention it, sugar farmers knew that Cong Dino was referring to the huge volume of imported sugar which entered the country.

Seven mills started operations this month. Only Hawaiian and First Farmers reported millgate prices at an average of P3,041 per bag, while prices at Lopez, Sagay, VMC and La Carlota ranged from P2,550 to P2,700. Prices in the six mills averaged at P2,772 per bag, while Sonedco gave an advance of P2,000 per bag due to lack of bidders. In contrast, sugar prices in September 4 last year averaged P3,021 per bag.

Sugar Regulatory Administrator Paul Azcona quickly stated that SRA has been pushing for the P3,000 per bag price, as he felt “it is the fair market price and this has been echoed by the administration as well as an incentive for farmers to plant more and be more sustainable”.

“Definitely none of the farmers want the low price so we will focus our investigation among the mills, traders and importers to see if there is some abnormality in their dealings but rest assured that we will get to the bottom of this. Someone is definitely making a scenario and we will not take this sitting down,” empathically warned the Administrator.

Azcona mentioned the mills, traders and importers as the focus of SRA’s probe into the low prices. Insiders know that millers, traders and importers are not separate entities but are the industry’s version of the 3-in-1 package.

Last May, when SRA floated the idea of importing 150,00 metric tons in addition to imports authorized by Sugar Orders No. 2 & No. 3 (Crop Year 2022-2023), Cong Dino cautioned SRA to “revisit the proposal and take a look at the figures”. Other industry organizations, particularly Confed, NFSP and Panayfed, shared Cong Dino’s sentiments.

By then, SRA has already allowed the importation of 150,000 mt (SO#2) and 440,000 mt (SO#6). The Agriculture Department added 64,000 mt imports under the Minimum Access Volume (MAV) scheme for good measure. Yet SRA issued Sugar Order No. 7 (dated May 25 but released July 6), which authorized the importation of another 150,000 mt.

Sugar imports under SO#2, SO#3, SO#7 and the MAV amount to about 800,000 mt of imported sugar for CY 2022-2023.

All these importations were supposedly to address the sugar shortage and lower the soaring retail sugar prices.

Retail prices have remained at more than P80 per kilo for raw sugar and more than P90 for refined sugar. The prevailing prices can provide a gauge of the importation’s success in lowering the high retail prices.

On addressing the shortfall in domestic sugar production, the importations might have achieved its purpose, and perhaps might have overachieved it.

Average millgate prices last week was P2,772 per bag (P2,550 per bag to P2,700 for Lopez, Sagay, VMC and La Carlota and P3,041 for Hawaiian and Lopez).

Which way will sugar prices go this week?

Cong Dino, SRA chief Paul Azcona and all the sugar farmers are keeping their fingers crossed that sugar prices will fare better this week.

Hawaiian, which conducts bidding a day ahead of other mills and acts as an indicator of the price level for the week, reported a price of P3,005 per bag in its bidding this afternoon.* (Butch Bacaoco)