Gov’t intervenes in sugar market with P5 billion scheme to purchase direct from farmers to support farmgate price

January 21, 2024
Business World |

THE GOVERNMENT has allocated P5 billion to purchase sugar directly from farmers in order to prop up farmgate prices, an industry group said on Sunday.

“President Ferdinand R. Marcos, Jr. approved the initial budget of P5 billion for the government to directly purchase sugar from farmers at a premium price,” Manuel R. Lamata, president of the United Sugar Producers Federation of the Philippines (UNIFED), said in a statement.

Industry groups have called for government intervention to narrow the gap between sugar farmgate and retail prices. UNIFED said that this gap has been in place since the start of the milling season in September.

“To my fellow sugar planters, do not sell yet your sugar at these low prices. Wait a little more because our President has stepped in to help the sugar farmers,” Mr. Lamata said.

He said earlier that trading prices for raw sugar have declined to P2,300-P2,500 per 50-kilogram bag, which is below the production cost for producers.

Separately, the Sugar Regulatory Administration (SRA) said that it had recently met with sugar industry representatives to draft procedures for direct purchasing.

Last year, the SRA said trading prices for sugar will remain stable at P3,000 per 50 kilo bag.

“We also discussed steps to be taken to further enhance productivity and profitability, ensure stability of sugar supply for consumers and industrial users, and retail prices, keeping in mind that the sugar farmer is also a retail consumer,” SRA Administrator Pablo Luis S. Azcona said.

The regulator has projected a possible 10-15% decline in raw sugar production due to El Niño. Official estimates place production at 1.85 million MT for the crop year.

El Niño is projected to persist until May this year and bring drought and dry spells to 63 provinces, according to PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), the government weather service.

Mr. Azcona has said that the SRA was planning to impose a suggested retail price scheme for sugar.

The retail price of refined sugar in Metro Manila markets was between P74 and P100 per kilo, while brown sugar fetched P60-90 per kilo, according to Department of Agriculture price monitors. — Adrian H. Halili