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SRA urges sugar supply chain checks

THE Sugar Regulatory Administration (SRA) on Monday called on concerned regulatory bodies to intervene in the sugar supply chain in a bid to facilitate fairer prices in the retail market.

During a press conference in Manila City, SRA Board Member Emilio Bernardino Yulo said that while prices at the farm gate provided just enough earnings for sugar producers and farmers, prices at the retail market remained too high.

He complained that the SRA was being “unfairly blamed” for the very high prices of the sweetener when it’s the fault of the profiteers.

The SRA urged the Department of Industry (DTI) and the Department of Agriculture (DA) to study the “layers of the sugar supply chain’ and from there device a scheme to impose suggested retail prices (SRP) on sugar.

“We would like [to have SRP on sugar] because we are being unfairly blamed for the prices. They say producers are making a lot of money but the truth to the matter is we are just merely surviving. We are calling on DTI or DA so they could make necessary [measures],” Yulo said.

The average mill gate price of raw sugar is currently at P1,450 per sack of 50 kilograms (kg) while refined sugar costs about P3,100 per sack of 50kg, according to Yulo.

He said the cost of producing sugar was about P2,100 per 50kg and if divided, it would at least give consumers a P42 per kilo price. However, the average retail price of the sweetener stands at about P50 per kilo.

Yulo explained there were about three layers in the local sugar supply chain from farms to supermarkets. The sugar produced by farmers are sold to traders who handle the refining process. A mark up will be made once “brokers” come in on the chain via paperless trading, said Yulo.

“After this, others would sell sugar directly to Manila [markets],” he added.

Atty. Vic Dimagiba, president of Laban Konsyumer, blamed the supply chain for the high prices of sugar at the retail market, pointing out that transportation cost and fuel are the main drivers of unfair prices, eventually hurting consumers.

“If we have three or four [layers of supply chain], that means there are three or four who would spend money for gasoline and electricity and these businessmen will pass these to the cost of the good. When it comes to us [consumers], the prices are doubled,” said Dimagiba.

In January this year, the average sugar price was at P48/kg. Beginning April to May, retail prices were recorded at P60/kg which continued to rise to about P62/kg to P65/kg level in the second half of 2018.

Meanwhile, Roberto Amores, president of PhilFoodEx, said the current sugar prices could be lot higher in 2019 if the government will push the additional excise tax on fuel under the second phase of the Tax Reform Acceleration and Inclusion (Train) law.

Amores also said the government should allow the importation of sugar by beverage corporations to be used solely for domestic food processing to balance the growing demand and supply of the sweetener.

Beginning next year, Yulo said consumers may also expect higher prices of sugar at the retail level because of possible supply shortfall due to lesser planted areas nationwide, noting that climatic conditions may further cut supply.

In the Philippines, there are about 700,000 sugar workers with over five million families directly and indirectly benefiting from the sugar industry.