Sugar has become our bitter pill

There is always something bizarre about the month of August. Perhaps, the ghost month is real. We were told the realms of heaven and hell open around this time and ghosts would come out. The result is that some days are messier than others or the usual cosmic order just disappears.

Just like our sugar mess. What is happening in the sugar industry, Mr. President?

What’s clear is that sugar has become so bitter because of its high price. The price of refined sugar has doubled, reaching a high of up to P115 per kilo last Aug. 5 from just around P60 per kg a year ago, according to government data.

For weeks now, I’ve been asking industry players where the problem is coming from and sadly, it has nothing to do with Chinese folklore, which wants us to believe that the Gates of Hell are open.

Instead of the ghosts, one should blame the greedy sugar barons of the country, some of my sources said. They are the well-entrenched elite in agriculture who can decide whether or not there is a shortage.

One local sugar industry source said the bodegas of these traders are filled with enough sugar supply that even the ants are overwhelmed.

Why then are they hoarding?

It’s the usual law of supply and demand. Demand – and prices – rise when there is a shortage or a make-believe shortage in supply.

It’s all about the money, the source said. The sugar cartel just wants to make more money and they don’t care if the Filipino consumer has to shell out more to buy sugar or anything else that requires sugar.

Another source believes that flooding the market with supply will punish the hoarders and bring down the price.

On the other hand, increasing local production will take time. It does not happen overnight, says the source, an expert in agriculture.

Big bottlers Coca-Cola Beverages Philippines, Pepsi-Cola Products Philippines, and ARC Refreshments Corp. confirmed that the industry, indeed, “is facing a shortage of premium refined sugar or bottlers’ grade sugar.” This, they said, is a key ingredient for their products.

As it is now, it’s the consumers who are at the losing end. Companies certainly won’t put off passing higher costs because that would cut into their margins.

Against this backdrop, President Marcos, who is concurrent head of the Sugar Regulatory Administration board, and Agriculture Secretary, must really look into the matter and come up with long-term solutions to the problem.

Of course, a careful balance must be attained between protecting consumers against rising prices of basic commodities and ensuring the viability of local industries.

But clearly, the government must help make the local sugar industry become competitive and the sugar cartel, as well as the syndicates in agriculture, must be abolished. That will take political will and I hope that Marcos, who put himself at the helm of the agriculture portfolio, can take on the challenge. A careful balance must be attained between protecting consumers against rising prices of basic commodities and ensuring the viability of local industries.

Boosting renewables

Speaking of competitiveness, the government must also help improve the competitiveness of our bioethanol industry while addressing high oil prices. Bioethanol, an alternative fuel, is produced from sugar- and starch-containing crops.

It would be good to see a stronger implementation of RA 9367 or the Biofuels Act of 2006 as an option for alternative fuels.

“We need to think long-term, to avoid coming to another situation like this in the future. So long as we are dependent on foreign oil, our prices will be dependent on the very volatile international arena as well. That is why, we must strengthen our local alternative fuel sources, like biodiesel and bioethanol, which can be produced in the country,” said Senate President Juan Miguel Zubiri, who authored the law.

The Biofuels Act, Zubiri said, aims for the country to follow Brazil, India, Thailand, and Malaysia, which produce their own biofuel.

The law aims to reduce the country’s dependence on imported fuels with due regard to the protection of public health, the environment, and the natural ecosystems consistent with the country’s sustainable economic growth.

On the other hand, suspending the biofuels law is regressive. Calls toward this end are missing the bigger picture.

Actually, a higher discretionary blend rate of bioethanol provides further economic benefits through greater greenhouse gas mitigation.

These environmental savings through carbon intensity reduction will generate wide-reaching benefits to key sectors such as tourism and alleviate pressure on public expenditures such as healthcare, the US Grains Council, a US Department of Agriculture Cooperator and non-profit organization, has said.

In fact, the 10-member Ethanol Producers Association of the Philippines is even pushing to raise the biofuels blend to 15 percent by 2023 and 20 percent by 2025 from 10 percent at present to pull down gasoline prices, generate more savings from avoided GHG emissions, and of course, to help preserve the environment.

We really cannot be forever dependent on imported fuels or imports in general—be it carrots, vegetables, cement, etc. At the very least, we should at least try to reduce our dependence by making our industries competitive.

Iris Gonzales’ email address is [email protected].

Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com