DA orders release of 150,000 kilos of sugar

MANILA, Philippines - Department of Agriculture (DA) officials have stepped up efforts to increase domestic supply of sugar to stabilize prices.

Agriculture Secretary Arthur Yap recently ordered the Sugar Regulatory Administration (SRA) and the National Food Authority (NFA) to coordinate with the Philippine Sugar Millers Association (PSMA) and immediately make available 150,000 kilos of sugar to the public.

The sugar would be sold through the NFA’s Tindahan Natin outlets in Metro Manila in the coming days.

Yap and other DA officials reached an agreement with local traders to fast-track a plan to import 150,000 metric tons (MT) of sugar to stabilize prices in the domestic market.

The DA endorsed to Trade Secretary Peter Favila the recommendation of SRA Administrator Rafael Coscolluela for the adoption of a suggested retail price (SRP) for sugar. DA officials recommended an SRP for refined sugar of P52 per kilo for the last week of January 2010.

Yap explained to Favila in a Jan. 25 letter that mill gate prices change every week.

There is a three-week lag for sugar prices to be reflected in the retail market, Yap said.

Yap said the recommended SRP for the last week of January is reasonable because it is reflective of the wholesale/landed price of P2,400 per 50-kg bag and is a result of the recent monitoring operations by the SRA and DA.

He added that the weekly SRP would prevent the tightening of supply in the market while also ensuring consumers of a fair retail price.

Yap has also directed the SRA to issue new regulations requiring sugar traders to liquidate their sugar release orders to make sure that “sugar stocks withdrawn from the mills do get to the intended beneficiaries in the local market instead of being smuggled out in the face of spiraling prices abroad arising from tightening supplies.”

Implementing the same strategy that the DA and NFA had undertaken during the other year’s rice price crisis, Yap ordered agriculture officials to monitor price movements from sugar mill to market to find out where exactly abnormal price movements occur in the supply chain.

He explained that rocketing production expenses and bad weather have combined to cut yields over the past two years, leading to a global shortage of an estimated nine million MT that has exerted upward pressure on prices in the international market.

India’s aggressive efforts to beef up domestic inventories have driven international prices up further, he added.

Officials of the DA, SRA, NFA, and the PSMA met yesterday with sugar traders and government-accredited importers and discussed how to avail of the tax expenditures subsidy.

Accredited traders were originally set to bring in their imports by May, but the tightening domestic supply and the ensuing retail price spiral have prompted the DA to allow earlier importations.

“We have asked accredited sugar importers to acquire ahead of schedule a volume ranging from 60,000 MT to 150,000 MT under the NFA’s TES (tax expenditure subsidy), which provides for a zero import tariff as a way to stabilize the supply and prices of this commodity in the domestic market,” Yap said.

While the new price levels benefit domestic producers, some 80 percent of whom are small farmers who are mostly agrarian-reform beneficiaries, Yap assured the people that the government is trying to balance the interest of producers with the needs of Filipino consumers.