Low output, blocked imports spark sugar shortage fears

The sugar supply situation in the Philippines has taken a turn for the worse as the industry’s government regulator warned of a shortage in raw sugar, with manufacturers now forced to source the product locally, competing for already limited supplies in the market.

“Manufacturers who didn’t buy raw sugar historically are now buying even raw sugar to have the raw sugar processed as refined sugar for their consumption,” Sugar Regulatory Administration (SRA) administrator Hermenegildo Serafica said in a statement. “So, now, there is also going to be a shortage in raw sugar.”

The agency criticized moves to block the importation of refined sugar, which it said had caused an increase in prices in recent months.

Latest data from the SRA showed the retail price of raw sugar in supermarkets ranges from P49.50-P71 per kilogram against P41.07-P56.85 per kg recorded in the same period a year ago. The same sugar is sold in public wet markets for P58-P70 per kg at present compared to last year’s P43-P48 per kg.

‘Situation out of hand’

Prices of refined sugar in supermarkets have gone up to P62.50-P90 per kg versus P50-P63.35 per kg. In public wet markets, it retails for P70-P80 per kg from P50-P58 per kg a year ago.

“It is only now that the prices have [gotten] out of hand and there is this situation that we are about to run out of sugar,” said Serafica.

The country’s sugar production is estimated at 1.8 million metric tons (MT) while demand for the past three crop years has been around 2.03 million MT.

The SRA attributed the output decline to the “residual effects of Typhoon ‘Odette,’ continuous rain and overcast skies dampening the growth and sugar content of sugarcane.”

This particular scenario, it said, could have been prevented if not for the legal impediments brought about by various sugar groups.

To recall, the SRA authorized the importation of 200,000 MT of standard refined sugar and bottlers’ grade sugar for industrial users. The agency described these users as “confectionery, biscuit, bread, candies, milk, juice, and food and beverage manufacturers” using refined sugar in manufacturing their products in the country and selling them in the domestic market.

Industry’s legal challenge

Sugar producers, however, challenged before the regional trial courts in Negros Occidental the government’s sugar importation program, saying this would severely affect the sugar industry.

Serafica said the “damage caused by the delay in its implementation was already done and is being felt now. Due to the delays, it is only now that imported sugar is starting to trickle in.”

The SRA recently announced the importation round is implemented nationwide except in Western Visayas, where a court injunction was issued effectively stopping the SRA from implementing the policy prescribed in Sugar Order (SO) No. 3.

“If SO3 had been implemented according to schedule, we would have been able to address the demand of the manufacturers early on, prices would not be this high and our raw sugar and refined sugar supply would not be at this critical volume,” he added.