• GILBERT P. BAYORAN
Sugar producers and labor groups are urging the Department of Agriculture (DA) and the Sugar Regulatory Administration (SRA) to intervene in the current millgate prices of raw sugar that have fallen below production costs.
In a statement, the Sugar Council, composed of the Confederation of Sugar Producers Associations, National Federation of Sugarcane Planters, and Panay Federation of Sugarcane Farmers, together with the National Congress of Unions in the Sugar Industry of the Philippines-Trade Union Congress of the Philippines and Democratic Association of Labor Organizations, reported that raw sugar millgate prices in Negros Occidental averaged about P2,600 per 50-kilogram bag (LKg) in October.
They said the price is no longer sufficient given rising production costs and declining farm productivity, and are now seeking a baseline millgate price of at least P2,900 per LKg.
The higher price is needed to help planters cope with increasing expenses for fertilizer, fuel and hauling, and farm labor, they added.
The Sugar Council also pointed to what they described as a significant gap between millgate and retail prices.
Raw sugar was reportedly selling at as much as P73 per kilo or P3,650 per bag, compared with the average millgate price of P2,600 per bag.
They said the P1,050 per bag difference is difficult to justify even after accounting for the margins of traders, wholesalers, repackers and retailers.
The groups stressed that the problem is aggravated by low cane tonnage and low sugar recovery, as farms continue to reel from the impact of red-striped soft scale insect infestations and unfavorable weather conditions.
Under current field conditions, a planter producing an average of only 65 net tons of cane per hectare or less, with sugar recovery of about 1.5 LKg per ton of cane (LKg/TC) would need a millgate price of at least P2,900 per bag just to break even, according to the comparative study cited by the groups.
At the current average bid of P2,600, farmers are left operating at a loss, they said.
The groups warned that continued low prices could leave small farmers and agrarian reform beneficiaries without enough resources to finance the next planting season and recover losses from previous crops.
This could further reduce cane production and worsen the supply situation of already stressed sugar mills, creating a cycle of declining farm productivity, financial losses and reduced cane supply, they added. | GPB
