• GILBERT P. BAYORAN
Alarmed by the drop in sugar prices below production cost, at only P2,400 per 50-kilogram bag, Negros Occidental Fifth District Rep. Emilio Bernardino Yulo called for an investigation into the factors behind the price instability.
In a privilege speech at the House of Representatives on Dec. 9, Yulo said that he wants to hold accountable those who are tasked to protect the sugar farmers and those who take advantage of the situation for an “unimaginable profit”.
“We cannot afford to let this issue continue. It is imperative that we take immediate and decisive action to stabilize sugar prices and safeguard the livelihoods of our small sugarcane farmers,” he stressed.
Sugar producers have been seeking government intervention to arrest the sharp decline in the prices of locally produced sugar.
While sugar farmers were greatly relieved when millgate prices averaged at P2,850 per 50-kilogram bag at the start of the milling season, Yulo, a former Sugar Regulatory Administration board member, noted that prices declined to around P2,750.00 in October.
It plunged further to an average of P2,600 in early November, with a P250 drop in just two months.
Two weeks ago, it also dropped to an average of P2,500 per bag.
To make matters worse, last Thursday, it further went down to P2,470 or a drop of almost P400, the solon said.
Citing Economics 101, which states that when the supply is low and the demand is high, prices will naturally go up, Yulo said that “strangely, the law of supply and demand does not seem to apply to the sugar industry right now.”
“Elementary as it is, we all know that the law of supply and demand moves inversely proportional with price, but presently such is not the case. Despite relatively low supply and an expected surge in demand for sugar this Christmas season, prices continue to drop,” he noted.
Stressing that the required raw sugar buffer stock is about 200,000 metric tons which translates to a 60-day buffer stock, Yulo said that the supply side has dropped to approximately 150,000 metric tons, or just a meager 45-day supply as of Nov. 15.
“This defies any logical explanation and contradicts the fundamental principle of supply and demand,” the solon pointed out.
Despite the low supply and the steady demand for sugar, the industry faces low and declining sugar millgate prices.
“This is an aberration,” which Yulo described as a product of artificial manipulation, something that requires immediate attention.
Moreover, while the millgate price of sugar has dropped significantly, supermarket prices have remained the same consistently, creating a huge disparity that burdens both small farmers and our consumers, he added.
SRA Administrator Luis Pablo Azcona, who was present during Yulo’s privilege speech, said that he will attend any congressional inquiry, if it will help the sugar farmers.
He added that the Sugar Board is coming up with programs this month to curb the downward spiral in millgate sugar prices. | GB
