By the reckoning of the country’s sugarcane growers, 99.9 percent of sugar milling facilities nationwide are about 100 years old.
If these facilities would be upgraded to international standards, Manuel Lamata estimates that the millers could recover so much more from domestic planters’ sugarcane. Studies have shown that Philippine millers’ recovery of cane sugar is 15 percent lower than those in Thailand and 36.5 percent lower than in China.
Lamata heads the United Sugar Producers’ Federation. UNIFED believes the current sugar shortage is artificial, and inefficiencies particularly in milling are among the top causes of the doubling of sugar prices from last year.
Sugarcane production itself, however, is behind the country’s neighbors. Studies show that our planters are producing 60 tons of sugarcane per hectare compared to 100 tons in Thailand, for example.
An honest-to-goodness inventory of the country’s sugar stocks would bear out their stand that the shortage is artificial, Lamata said. UNIFED has been proposing that such an inventory be conducted regularly by the Sugar Regulatory Administration. But he said not a single inventory was carried out by the SRA under Hermenegildo Serafica.
Last Tuesday, Malacañang announced that President Marcos had accepted Serafica’s resignation. Lamata’s reaction: “Good riddance.”
Serafica had been protecting sugar millers and neglecting the plight of sugarcane planters, Lamata told “The Chiefs” on One News last Tuesday.
At the start of this year, the SRA had even projected a strong harvest, Lamata told us. But then the SRA announced that 200,000 metric tons of sugar would be imported last February. Sugar planters secured two temporary restraining orders from trial courts in Negros, but the importation apparently was just suspended.
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Last Wedneday night, Rosendo So, president of SINAG or Samahang Industriya ng Agrikultura told The Chiefs that by end-June, up to 180,000 MT of sugar had been brought in.
So why did sugar prices soar into the stratosphere, and why do the Department of Agriculture (DA) and SRA continue to insist on a sugar shortage?
Agricultural scientist Leocadio Sebastian, apparently believing he had been authorized, as chief of staff to the DA secretary, to act (and sign documents) on behalf of his superior who happens to be President Marcos, and apparently believing he had been given the green light to import, signed Sugar Order No. 4, for the importation ASAP of 300,000 MT of sugar.
We have yet to get a full, unbiased picture of what befell Sebastian, who has quit as DA undersecretary and might face administrative and even criminal charges, depending on the way the political winds blow.
Executive Secretary Victor Rodriguez, who seems to be in the crosshairs of rival power blocs in the Palace, is being linked to Sebastian’s moves. As of yesterday, however, it didn’t look like Rodriguez was about to go down with Sebastian… yet.
Malacañang said Rodriguez was behind the “visitations” conducted jointly yesterday by SRA, Customs and Department of Trade and Industry personnel on sugar warehouses in Pampanga and Bulacan.
At the same time, Malacañang announced a Cabinet consensus to allow the importation of 150,000 MT of sugar.
So is there a shortage or not?
On Tuesday, new Undersecretary (and DA returnee) Domingo Panganiban said he would also be serving as acting DA secretary. For the sake of the agriculture sector that’s in crisis, let’s hope President Marcos is aware of this arrangement, and Panganiban is also not getting mixed signals about the extent of his authority.
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Lamata acknowledged that sugar production is down due to COVID restrictions and higher input costs particularly for fertilizer, whose global supply has seriously tightened because of Russia’s invasion of Ukraine.
He also says that “immediately” importing 150,000 MT of sugar would bring down retail prices. But he says this must be limited to refined sugar, and released only to general consumers rather than industrial users.
Lamata shares the observation of some quarters that sugar prices are unconscionably high. Even with the tight supply and high prices of fertilizer and other costs, planters are selling sugarcane to millers at P48 per kilo. Both Lamata and So say the reasonable market price of refined sugar should be no more than P75 to P80 per kilo.
Lamata frowns on another move that Malacañang is reportedly considering, which is to allow industrial users to directly import their sugar needs. He is appealing to industrial users to support domestic producers instead and to buy local.
Go Negosyo founder Joey Concepcion, whose family owns food and beverage giant RFM Corp., says he’s all for supporting local producers, but not inefficiencies.
He echoes Lamata’s observations about nearly all sugar mills in the country being “antiquated.”
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Rosendo So says in the case of onions, this is truly the lean season for white onions. Harvest time for the crop, whose heaviest users include pizza and burger chains, is typically in April, and the harvest has a storage life of only four months. That means now – hence the eye-watering price of P400 per kilo.
The next regular harvest will be in February next year at the earliest. Imports, So says, will have to meet the demand, even if a small local harvest might be possible in November.
His advice to consumers: buy red onions instead; it has stronger flavor. (True, although white onions have a sweetish note that red onions don’t impart.)
Sugar is another story. Three top soft drink manufacturers – Coca-Cola, Pepsi-Cola and ARC Refreshments – have issued a joint statement confirming the existence of a sugar shortage.
Critics of the SRA under Serafica aren’t about to cut him (and Sebastian) slack. SINAG’s So told us that even before Sebastian had signed SO4, shipments mostly from Thailand amounting to 50,000 MT of sugar – part of that 300,000 MT new import order rather than the 200,000 MT in February – arrived “about 10 days ago” through the ports of Manila and Subic. So said Sebastian did not mention either the shipment or SO4 at a meeting with Marcos and some agriculture stakeholders.
Amid this mess, ordinary consumer’s main concerns are stable sugar supply and reasonable prices. Certain agriculture industry observers believe domestic planters and millers alike have been mollycoddled forever by the government, making them uncompetitive and opening the doors to supply and price manipulation.
And the industry observers wonder if Marcos, who bowed to the powerful tobacco lobby and, like his supposedly anti-smoking predecessor, allowed the vape bill to lapse into law, will have the political will to make domestic sugar industry producers shape up… or face an avalanche of imported sugar.