The United Sugar Producers Federation (Unifed) has called for immediate government action to address the alarming decline in mill price of sugar, which is threatening the livelihood of local farmers. The group claims that artificial pricing practices are distorting the market, and that traders, rather than the forces of supply and demand, are driving down prices without benefiting consumers.
Manuel Lamata, president of Unifed, expressed growing concern in a statement released over the weekend, noting a significant drop in milling prices. According to Lamata, mill prices have dropped by approximately P100 per 50-kilogram bag (LKG) of sugar in just one week, averaging P2,500 per LKG. He said that while milling prices are plummeting, retail prices remain stubbornly high and could increase further as the holiday season approaches.
“We urge the Department of Agriculture (DA) and the Sugar Regulatory Administration (SRA) to intervene as soon as possible and to unmask the culprits who are playing us,” Lamata said. Unifed believes that traders are manipulating sugar prices to their advantage, inflating their profits at the expense of both sugar farmers and consumers.
This development has significant consumer impact in that food inflation accounted for around a quarter of overall inflation in recent months. The index of sugar in the basket of commodities and goods regularly surveyed by government policy planners, could act up and help ruin the projected path of commodities prices down the line.
Already, the Bangko Sentral ng Pilipinas projects inflation in November as high as 3 percent from only 2.3 percent in October. The private lender Bank of the Philippine Islands also earlier forecast higher inflation in November to 2.5 percent, it was noted.
Lamata cautioned that the disconnect between mill and retail prices is unsustainable. Despite falling mill prices, sugar is still being sold at inflated retail prices, with the cost of refined sugar in Metro Manila ranging from P74 to P90 per kilogram. “While mill prices are dropping, we fear that retail prices will remain high or even increase, particularly during the holidays,” Lamata added.
Unifed also pointed to an erratic pricing trend that has raised suspicions of market manipulation. Since the start of the milling season, prices have fluctuated unpredictably, contrary to what would be expected based on supply and demand. Lamata believes this volatility suggests that external factors, particularly traders’ actions, are responsible for the market instability.
The Federation has urged the government to step in with measures to stabilize prices and support local farmers. One suggested intervention is for the government to directly purchase sugar from local mills and sell it to the public, thereby eliminating middlemen who are driving up costs.
“We fear that this continued downtrend will have a severe impact on our small farmers, who make up more than 80 percent of the industry,” Lamata said, pointing to the added strain of rising production costs caused by the ongoing drought. “Farmers are hoping for a better holiday season, but without intervention, they may face even more hardship.”
According to data from the SRA, the composite price of raw sugar stood at P2,698.82 per LKG as of 3 November. In comparison, farmers had hoped to see prices closer to P2,800 per LKG to secure a modest profit.
The crisis comes at a critical time for the sugar industry, with farmers struggling to stay afloat amid rising input costs and the impact of a prolonged drought. Lamata urged farmers to hold on to their sugar until prices stabilize, although he acknowledged that this is a difficult request, especially for smaller producers who rely on weekly sales.
“We may all need to tighten our belts so we will not be abused by these unscrupulous traders,” Lamata concluded, calling for swift action to protect both sugar farmers and consumers from exploitation.
