Tuesday, February 11, 2025
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HomeFood and BeveragesLow prices hound sugar farmers

Low prices hound sugar farmers

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This pretty much summarizes the sad plight of sugar farmers since the start of milling for Crop Year 2024-2025 (which began September 1) until the end of 2024.

The average monthly millsite price of raw sugar in September 2024 was P2,756.44 per bag for only two bidding weeks in First Farmers, which started milling on September 17.

After Hawaiian, Vicmico, Lopez, Sagay, Option MPC, Biscom, URC-Sonedco, and URC-La Carlota followed suit in October, average monthly sugar prices improved to P2,801.25, demonstrating that healthy competition among mills is beneficial for farmers.

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In November, sugar prices drastically dropped to only P2,653.33 and further down to P2,506.72 in December, causing alarm among sugar farmers.

Stakeholders believed that the drop in prices was caused by the untimely entry of 240,000 metric tons of imported refined sugar right at the start of the crop year.

The Sugar Regulatory Administration claimed that such a price drop is unexplainable, considering the low domestic sugar production compared to the previous crop year, while some sectors alleged there was price manipulation by devious sugar traders.

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A closer look at sugar supply and demand figures from September to December 2024 might provide a clearer picture of what caused sugar prices to behave that way.

Starting balance for raw sugar in the mills as of September 1, according to the SRA Sugar Supply & Demand Situation report for Week Ending December 29, 2024, is 272,005 metric tons, almost two times higher than the 184,815 metric tons last crop year.

Refined sugar starting balance is 308,518 metric tons, consisting of 230,826 metric tons of mill production and 77,692 metric tons balance from refined sugar imports, a spillover from the massive importation of approximately 750,000 metric tons of refined sugar two years ago.

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Last crop year, the starting balance for refined sugar was a whopping 572,501 metric tons, consisting of a staggering 409,500 metric tons of imported sugar (spillover from the previous year) and only 142,051 metric tons of locally produced refined sugar.

Although this crop year’s refined sugar balance of 308,518 metric tons is lower than last crop year’s 572,501 metric tons, the almost 264,000 metric tons difference did not matter much because of the arrival of approximately 210,000 metric tons of imported refined sugar right at the start of CY 2024-2025.

About 40% of domestic raw sugar production is processed into refined sugar for use by food processors and industrial users.

When traders and end-users still have sufficient stocks of imported refined sugar, then demand for domestic refined sugar weakens, consequently weakening demand for domestic raw sugar, and eventually softening prices of raw sugar.

Sugar industry stakeholders saw this happen last crop year when the imported refined sugar balance was 409,500 metric tons.

Sugar prices in CY 2023-2024 failed to breach the P3,000 mark, except in the first two weeks of bidding.

It was only in September 2023, during the first month of milling, that prices reached the highest at a monthly average of P2,757.71 per bag.

Prices rolled downhill, with January 2024 registering the lowest monthly average sugar price for CY 2023-2024 at P2,405.23 per bag, while the second lowest monthly average was in December 2023 at P2,414.98 per bag.

The previous crop year closed with a monthly average of P2,444.22 per bag in the third week of May 2024.

For CY 2024-2025 so far, monthly sugar prices have averaged P2,756.44 per bag in September, P2,801.25 in October, P2,653.33 in November, and P2,506.72 in December.

Will the new year 2025 bring a rebound of sugar prices?

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Julius D. Mariveles
Julius D. Mariveles
An amateur cook who has a mean version of humba, the author has recently tried to make mole negra, the Mexican sauce he learned by watching shows of master chef Rick Bayless. A journalist since 19, he has worked in the newsrooms of radio, local papers, and Manila-based news organizations. A stroke survivor, he now serves as executive editor of DNX.
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