By Butch Bacaoco
Sugar farmers are among the happiest people during the past several weeks, as farmgate sugar prices have considerably improved compared to their December level.
At the start of Year 2025, farmgate prices ranged from P2,605 (Biscom) to P2,700 (Hawaiian) per bag, which was a whole lot better than the December average monthly price of P2,486.63.
Average monthly price for January was P2,753.82 per bag, while the February average was P2,937.16 for the first three weeks (Week Ending February 16).
Sugar prices for Week Ending February 23 ranged from P2,880.00 in Bais to a high of P3,000.88 in Hawaiian.
To the mild disappointment of sugar farmers, sugar prices slightly dipped during the bidding for Week Ending March 2. Bais and Central Azucarera de San Antonio (CASA) in Passi, Iloilo reported farmgate prices of P2,780.00 while Hawaiian prices also wavered to P2,980.88 per bag.
This caused sugar farmers to frown, but they comfort themselves with the thought that this price level is still acceptable because it gives them a little breathing room.
Small sugar farmers, which comprise more than 85% of the several hundreds of thousands of sugarcane growers in the country, spend approximately P2,400 per bag of sugar that they produce. This includes the cost of land preparation, cane points planting materials, fertilizers and pesticides, weeding, cutting and loading during harvest, transportation cost from the farm to the mills, and all the works.
While present price levels afford sugar farmers a little profit, they still have to contend with the previous months when they barely managed to earn a decent profit. And, as has been demonstrated time and again, good things never last.
How far can sugar prices go until it goes the way of all things that goes up?
Way back in August last year, Sugar Regulatory Administrator Paul Azcona said that farmgate sugar prices of up to P2,800.00 is a comfortable level. If millgate prices reach P3,000 per bag, retail prices will soar. This will cause problems for sugar farmers, he pointed out.
Lately, on February 20, Administrator Azcona stated:
“The threshold in prices is maybe at P3,000 to P3,100 per bag, which will not affect the retail price. Anything over that, the retail prices will go up. Retail prices kicked up in 2022 because our farmgate price was at P3,800. Refined sugar at that time in the market was P40 to P50 per kilo, which kicked up to P120 to P130 retail. We had no choice (but to import to lower retail prices).”
He explained that, if millgate prices become too high, it will cause a spike in retail prices, forcing government to step in and order massive importation. This will cause a huge problem for the sugar industry.
In the absence of hoarding and price manipulation, sugar prices should follow the universal law of supply and demand.
Demand for raw sugar, as of Week Ending February 16, is down by almost 5%, while demand for refined sugar is also down by 4.11%, compared to the same period last year.
On the other hand, raw sugar production is down 27.68% and total sugar supply is down 19.25%, as of Week Ending February 16 compared to the same period last year. As for refined sugar, production is down almost 39% and total supply is down almost 25%, compared to the same period last year.
With the slight drop in demand coupled with the substantial drop in supply, farmgate sugar prices supposedly should remain at their present levels.
“The best we (at SRA) can do is regulate supply. Hopefully, the prices will follow the law of supply and demand”, Azcona added.
“Now I ask the sugar leaders to have mercy on me. We are at this level. We should be happy. If we go over this, our enemy will be the NEDA and the economists,” Administrator Azcona explained.
