The Sugar Council and National Congress of Unions in the Sugar Industry (NACUSIP) expressed concern over the oversupply of imported and locally-produced sugar in the market that have led to a decline in prices.
The SRA and NACUSIP in a statement on Sunday said the declaration of the of the Department of Agriculture (DA) and the Sugar Regulatory Administration (SRA) that there would be no more sugar importation until the end of the harvest next year has failed to arrest the drop in mill gate prices of the sweetener.
The DA last week said there is no immediate need for additional imports, as domestic supply of both raw and refined sugar remains stable and sufficient to meet projected needs.
The Sugar Council and NACUSIP viewed this statement as a measure to allay fears that more importation would cause a further drop in sugar prices.
But the groups said this pronouncement failed to explain why sugar prices have steadily dropped over the past few weeks.
“At the Hawaiian Philippine Company sugar prices have dropped from PhP2,980.88 per bag for week ending (WE) October 20, to P2,815.99 per bag for WE November 10. That’s a price drop of P164.89 per bag in only three weeks. In other mills, sugar prices dropped to much lower rates as early as WE November 3,” the two groups said.
“An apparent decrease in demand has consequently caused the steady drop in prices,” the Sugar Council and NACUSIP said, stressing this is a concern which SRA should address.
Per SRA Supply-Demand Situation Report dated October 20, of the 240,000 metric tons (mt) imported refined sugar authorized by Sugar Order No. 5, Series of 2023-2024 signed on August 8, only 135,833.20 mt have entered the market, or balance of 104,167 mt.
Mill gate prices are trending down, groups said.
They added the same SRA report showed as of WE October 20, withdrawals for raw sugar dropped by 18.38 percent, while refined sugar withdrawals dropped by 20.18 percent, compared to the same period last crop year.
Only 1,314 mt of refined sugar was produced by refineries WE October 20, compare with 58,990 mt in the same period last year.
“If there is more than enough supply of imported refined sugar, it makes no business sense for refineries to withdraw raw sugar. Hence, demand for it goes down and mill gate prices drop. 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,” the Council and NACUSIP said
The Council and NACUSIP said aside from the increase in supply due to importation and the drop in demand, the industry also has to contend with the widespread use of artificial sweeteners in the beverage industry, particularly sucralose, aspartame, and acesulfame potassium.
The total importation of the three sweeteners, they said, increased from 950,989 kilos in 2022 to 1,100,783 kilos in 2023.
