No sugar; higher prices sought

MANILA, Philippines – Supply of refined sugar has tightened and consumers have reported soaring sugar prices in recent days despite a government-imposed price cap.

Local sugar producers are asking the Department of Trade and Industry (DTI) to adjust the price ceiling on sugar to P41 per kilo from the current P38 per kilo to accurately reflect the prevailing mill gate price of raw sugar.

Sugar Regulatory Administration (SRA) head Rafael Coscolluela told The STAR yesterday that the scarcity of refined sugar in the market is due to the refusal of sugar growers to sell their raw sugar to millers until they get an assurance on fair selling price for their product.

Coscolluela said the DTI committed an error in imposing a P38 per kilo price ceiling on sugar last Sept. 28 as it failed to consider the prevailing mill gate price of raw sugar.

He stressed that there is usually a three to four-week gap in computing the selling price of refined sugar.

Three to four weeks is the time it takes for sugar millers to sell their “quedans” to wholesalers who then resell these to repackers who in turn sell to distributors.

The P38 per kilo sugar price prevailing before storm “Ondoy,” was based on a lower mill gate price of P1,077 per 50 kilogram bag, Coscolluela said.

By Sept. 27, he pointed out that the mill gate price rose to P1257 per 50-kg. bag which should have translated to a P41 per kilo retail price.

Sugar planters and millers have explained the matter to Agriculture Secretary Arthur Yap who has recommended to the DTI the adjustment of the sugar price ceiling to P41.

The Price Coordinating Council, Coscolluela said, should have taken up the matter in a meeting today, but this was moved to Wednesday.

Coscolluela, however, assured consumers that there is no shortage of sugar supply, although millers would not release their sugar if the price ceiling is not adjusted to the prevailing mill gate price.

“They will not sell at a loss, and sugar supply to Manila will dry up,” he warned.

The SRA chief assured the public that domestic sugar prices would not likely go up beyond P41 per kilo as” there is a certain point or balance where prices can go which market can absorb.”

He noted that about two weeks ago, the price of sugar rose to as high as P1,400 per 50-kg bag, forcing local bakeries to complain that prices had gone up too fast.

But Coscolluela reiterated that if prices continue to increase, there is also the consequence of losing market.

World market and domestic sugar prices, Coscolluela clarified, are now almost at par at P1,350/50 kg. bag compared to last year when world market price was lower at P600/50 kg. bag as compared to the domestic price of P1,100/50kg bag.

World sugar prices have gone up due to the devastated sugar crops of Brazil and India. –Marianne Go (The Philippine Star)