Sugar prices picking up

Local sugar prices are picking up even as the National Food Authority (NFA) has scaled down its buying activities.

Agriculture Secretary Luis Lorenzo Jr. said millgate prices in Bacolod last Thursday ranged from P703 to as much as P742 per 50-kg bag.

"This week’s prices were, on the average, 2.24 percent higher than on March 25 when prevailing prices ranged from P691 to P726 per 50-kg bag," Lorenzo said.

The March 25 prices on the other hand, were, on the average, 1.88 percent higher than the prevailing prices last March 18 which ranged from P676 to P719 per 50 kg.

The NFA has budgeted P1 billion for the sugar-buying intervention that President Arroyo ordered to give sugar farmers some breathing spell after prices skidded to as low as P620 per 50-kg bag early this year.

Lorenzo said this should be good for 70,000 tons of sugar. The sugar-buying program will last until the fund is exhausted.

Sugar Regulatory Administrator James Ledesma reported to Lorenzo that as of April 1, NFA has bought a total of 226,959 kgs of sugar worth P159 million in Bacolod alone.

"NFA can either dispose of this sugar through their rolling stores and part of the stocks can be supplied to industrial users. But they will not compete with the local traders as disposition will be done when milling would have ended, which is about July or August," Lorenzo added.

Last month, President Arroyo signed two important measures – EO 293 which allowed NFA to start buying sugar as part of the government’s efforts to stabilize domestic prices and EO 295, which re-classified sugar-based pre-mixes in order to plug existing tariff loopholes that enabled imported pre-mixes to come into the country duty free.

The sugar industry lobbied to have the NFA bail it out as domestic prices hit rock bottom last Feb. 5 as millgate prices of sugar plunged to P638 per bag. The industry blamed this on sugar smuggling and imports of premix products.

Premixes are used as raw material in making beverages like instant teas, powdered juice drinks, or sugar-based foods with vitamin and mineral content. They contain 65 to 95 percent sugar by dry weight and should thus, be classified as refined sugar, the industry said.

Records show the country imports about 80,000 metric tons of premix juices a year. An additional 40,000 to 50,000 tons of sugar, darkened with carbon, are imported by softdrink makers.