MEASURES UNDERTAKEN BY SRA TO ADDRESS UPSURGE OF SUGAR PRICES
In order to address the upsurge of sugar prices last month, SRA issued Sugar Order No 1- A or the revised policy on the percentage allocation for crop year 2007 - 2008 and conversion of “C” or reserve sugar to “B” or domestic sugar last October 17, 2007.
Sugar price in the millsite has gone down from the peak price of P 1,315 per 50-kilo bag last October 7 to P 1,104.89 in October 22. SRA expects sugar prices to go down to its normal level of P 30 – P 32 for raw sugar and P 36 – P 38 for refined sugar in a few weeks. However, due to a high demand for “All Souls Day”, the decline in sugar prices might be felt during the second week of November.
Last November 7, 2007, the prevailing wholesale prices of raw and refined sugar as monitored by SRA are P 1,250 and P 1,630 per 50-kilo bag, respectively. BAS reported that the prevailing retail prices in the wet market of raw and refined sugar are P 34 and P 40 per kilo, respectively. As per SRA’s trend analysis, prices of raw sugar should go down to P 30-32 / kilo and refined sugar to P 36-38 / kilo by the second week of November.
The SRA Administrator, Mr. Rafael L. Coscolluela, is coordinating with the Department of Trade and Industry (DTI) through Director Victorio Mario Dimagiba for assistance of possible overpricing by retailers if until Saturday (November 10), retail prices of sugar will not decline.
SRA will also coordinate with NFA for the continuous supply of cheaper sugar by its rolling stores and outlets and with the Cooperative Development Authority (CDA) for Coop to Coop transactions of producers and retailers / consumers. NFA has a total stock of 41,940 bags (2,097 MT) refined sugar in its warehouse in Valenzuela, Bulacan as of October 31, 2007 at a retail price of P 33.50 per kilo.
As of October 14, 2007, our refined sugar stock balance was 2,015,489 bags (100,774 MT) which is sufficient to meet the needs of our consumers, both household and industrial users. SRA will advise the industrial users to directly transact business with the producers so as to avail of a lower price ranging from P 1,500 - P1,600 per 50-kilo bag of refined sugar. Mr. Coscolluela has initially coordinated with the producers such as Busco and First Farmers refineries for such purposes.
Sugar prices started to shoot up last week, according to the monitoring report of SRA and the Bureau of Agricultural Statistics (BAS) in October 9, 11 and 13. Retail prices were P 40.00/kg refined, up from P34.00-P 36.00, and P 34.00/kg raw, up from P 30.00 to 32.00/kg. Major factors which influenced the upward movement of sugar prices are as follows:
- Rainfall in Negros/Panay for September was 160% above normal, according to PAGASA reports.
- As of September 30, 2007, raw and refined sugar production decreased by almost 40 % and 56 %, respectively, as compared to the same period last year because of the rainy season which drastically slowed down harvesting of sugarcane. Sugar yield is usually low when sugarcane has a high water content, which is why sugarcane farmers are hesitant to harvest their canes during rainy days. Moreover, some of our sugar roads are not passable during periods of continuous rain.
- Victorias Milling Company also temporarily suspended refining operations due to lack of bagasse (fuel). The mill only resumed refining last October 11 (Thursday).
For the same period of last year, withdrawals of raw and refined sugar for domestic consumption increased by almost 19 % and 47 %, respectively, as of September 30, 2007. Withdrawals exceeded current production resulting in a temporary tightness in supply.
