Stock Photo | Brown sugar
The Sugar Regulatory Administration (SRA) of the Department of Agriculture denies claims that the country has a surplus of sugar that some groups said has resulted in declining prices.
“Sugar stock levels have been constant in the past couple of months and claims from certain groups that there is an oversupply of sugar that purportedly caused a drop in sugar prices is laced with malice, unless it is their goal to announce oversupply to purposely try and lower prices, for reasons they only know,” the SRA said in a statement.
SRA administrator Pablo Luis Azcona said that stocks of raw and refined sugar “are at the proper levels.”
Despite the 61-percent decline in production as of Nov. 10, the SRA chief said they have prepared for the anticipated drop in output with “proper buffer supply.”
He added, “As to their claims of oversupply for both raw and refined sugar, we are currently 35-37 percent below the levels recorded last year.”
The SRA issued this statement in response to a joint statement of the Sugar Council and National Congress of Unions in the Sugar Industry (Nacusip), which expressed their concern over the current oversupply of imported and locally-produced sugar in the market despite dwindling demand.
In a statement over the weekend, both groups said the recent pronouncement of the Department of Agriculture and the SRA that no sugar importation would be authorized until the end of the harvest failed to arrest the decreasing mill gate prices or the price of sugar at the mill.
“An apparent decrease in demand has consequently caused the steady drop in prices,” the groups said, adding they failed to explain the steady drop in sugar prices over the last few weeks.
Both the Sugar Council and the Nacusip noted that a considerable amount of locally produced raw sugar was withdrawn for refining.
“If there is more than enough supply of imported refined sugar, it makes no business sense for refineries to withdraw raw sugar,” it added. “It takes no stretch of the imagination to connect the drops in domestic demand and sugar prices to the entry of imported sugar, aside from sugar substitutes.”
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Yet, the SRA decried the presumptions made by the Sugar Council and the Nacusip, saying the decision made by the DA and the SRA was meant to apprise industry stakeholders of the current situation.
“There was no other intention for that announcement other than stand by our mandate to be transparent and keep the stakeholders informed,” Azcona said.
“The announcement of no importation until end of harvest which is sometime May or June, depending on harvest circumstances was simply an announcement for our stakeholders, and nothing more,” he added.
Azcona pointed out that these groups should attend consultative meetings organized by the DA and the SRA to discuss plans for the industry “instead of propagating false claims.” Yet, “like in other instances, the Sugar Council snubbed this meeting.”
“However, they would rather bring their concerns before the media to further destabilize the industry, then send a letter after the fact, and that does not sit well with me,” he added.
Per the SRA data, raw sugar stocks totaled 148,225 metric tons as of Oct. 20, a decline of 31.26 percent but the demand was slightly higher at 144,787 MT.
On the other hand, refined sugar stocks reached 323,983.20 MT, also down by 37.23 percent. Yet, the demand totaled 121,682.85 MT.
The sugar price rose by 3.17 percent to P2,827.85 per 50-kilogram from P2,741.06 per LKg.
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