The current low prices of sugar is very alarming, especially at this time when producers are at the peak of milling, Raymond Montinola, chairman of the Confederation of Sugar Producers Associations – Negros Panay Chapter, said yesterday.
If the trend continues it will be hard for farmers to recover their investments for this crop year, he said at a press conference.
The Sugar Regulatory Administration needs to come up with a constructive solution to the current low prices apart from the advance shipment of sugar to the US and world markets, he said.
Montinola noted that the SRA has initiated a move to revalidate the projected sugar production for this crop year, to hopefully come out with better sugar allocations.
Millgate prices of P1,100 to P1,200 per Lkg being experienced now is a scenario for 2015 when the tariff on imported sugar entering the Philippines is lifted, he said.
Sugar producers who survive the current low prices will be prepared to compete in 2015, Montinola said.
SRA Administrator Gina Martin Tuesday said millgate sugar prices had slightly improved by P30 to P50 per Lkg.
As of December 1 sugar prices had gone above P1,300 per Lkg.
Montinola said it could not be determined if the slight rise in prices would be sustainable for the rest of the crop year.
Luis Tongoy, a CONFED director, said the proposed Sugar Act of Rep. Alfredo Abelardo Benitez (Neg. Occ., 3rd District) is a correct direction to take to come up with ways to respond to liberalization of sugar in 2015.
Executive Order No. 18 that established the SRA does not give it powers to stabilize sugar prices under a liberalized scenario, he said.
The proposed fixing of sugar prices to be included in the Sugar Act maybe doable because that is what they do in Thailand, Tongoy said.
But to fix prices, a stabilization fund must be created to offset market forces from outside, he added.
Montinola said Martin has asked each sugar federation to send three representatives to be part of a working committee to come up with a plan to prepare the Philippine sugar industry for the challenges of 2015.
Tongoy said perhaps the plan will include inputs into the Sugar Act.
Meanwhile, Montinola said they are still awaiting a Bureau of Customs ruling on their bid for sugar premixes imported by Coca-Cola to be slapped with a 38 percent tariff.
He said CONFED has not lifted its boycott on Coke products for the firm’s importation of sugar in the guise of premixes, to the detriment of the domestic sugar industry.*CPG