THE Sugar Regulatory Administration (SRA) said on Tuesday that it supports an investigation after sugar producers reported that millers are offering them lower prices for their cane.
SRA Administrator Pablo Luis S. Azcona said sugar farmers are being offered millgate prices of as little as P2,400 per 50 kilograms. “So that amounts to about less than P50 per kilo.”
“If you look at the numbers, our wholesale price is constant, our retail price is constant. Only the farmgate price has fallen,” he said.
On Monday, a legislator urged the House of Representatives to investigate the drop in sugar millgate prices.
“Despite the low supply and the steady demand for sugar, the industry faces low and declining sugar millgate prices,” Negros Occidental Rep. Emilio Bernardino L. Yulo said in his privilege speech late Monday.
“This defies any logical explanation and contradicts the fundamental principle of supply and demand,” he added.
Mr. Yulo also raised the potential of price manipulation.
“Let us investigate the factors behind this price instability and hold accountable those who are tasked to protect the sugar farmers and those who take advantage of the situation for an unimaginable profit,” he said.
According to Mr. Azcona, at the current millgate price farmers are breaking even or cannot recover their cost of production.
“We have to remember 85% to 90% of our farmers are small farmers of one to two hectares. Most of them, if not all, are land reform beneficiaries,” he said.
He added that the ideal range for millgate price should be between P2,650 to P2,728. “Then at least farmers could break even.”
He added that the cost of production is “very high for this year” mainly due to the effects of El Niño and La Niña.
On the other hand, the yield per hectare of sugarcane has also fallen.
The yield for sugarcane declined 16% to an average of 1.47 LKGTC (50-kg bag raw sugar per ton of cane) from 1.75 LKGTC a year earlier.
Mr. Azcona said that millgate prices have remained low despite drop in supply and the expected increased demand for sugar.
According to the SRA, as of Dec. 1, the raw sugar inventory was 171,736 metric tons (MT), while refined sugar stocks totaled 308,554 MT. — Adrian H. Halili