The Department of Agriculture (DA) is taking more consumer-friendly steps to immediately beef up the domestic buffer stocks of sugar amid a recent price spike resulting from a global supply and price crunch.
Such measures lined up by the DA through the Sugar Regulatory Adminis-tration (SRA) and the National Food Authority (NFA) are topped by a directive by Agriculture Sec. Arthur Yap. The food agency must make available at once 150,000 kilos to be sourced from the Philippine Sugar Millers Association (PSMA) members and be made available for poor consumers via the NFA’s Tindahan Natin outlets in Metro Manila.
Yap and other agri-culture officials agreed with local traders to fast track a plan to import 150,000 metric tons of sugar into the country to stabilize soon the price of sugar in the domestic market.
Yap also endorsed to trade and industry Secretary Peter Favila the recommendation of SRA Administrator Rafael Coscolluela for the adoption of a suggested retail price (SRP) on sugar.
"The DA recom-mends that the SRP for refined sugar be increased to P52 per kilo for the last week of January 2010," in a letter to Favila. "In as much as mill gate prices change every week—and considering the three-week lag time for these prices to be reflected in the retail market—a weekly suggested reference price is recommended for refined sugar."
"This recommended SRP for the last week of January 2010 is reflective of the wholesale/landed price of P2,400 per 50-kg bag and is a result of the recent monitoring operations done by the SRA and DA. This is to prevent any tightening of supply in the market while also ensuring a fair retail price for the consuming public."
Yap directed SRA to issue new regulations requiring sugar traders to liquidate their sugar release orders to make sure that "sugar stocks withdrawn from the mills get to the intended beneficiaries in the local market instead of being smuggled out in the face of spiraling prices abroad arising from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 last year’s rice price crisis, Yap also ordered agriculture executives to keep tabs on price movements from the sugar mills to the markets to find out exactly where abnormal price movements are taking place in the supply chain.
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 metric tons that has exerted upward pressure on prices in the international market.
Officials of the DA, SRA, National Food Authority (NFA) and the PSMA discussed with sugar traders and SRA-accredited importers in a meeting in Makati office to avail tax expenditures sudsidy at the soonest possible time.
Accredited traders were originally set to bring in their imports by May yet, but the tightening domestic supply and the ensuing retail price spiral have prompted DA Secretary Arthur Yap and other agriculture executives to let them ship such deliveries months ahead of schedule.
"We have asked accredited sugar importers to acquire ahead of schedule a volume ranging from 60,000 to 150,000 metric tons under the NFA’s tax expenditure subsidy, which provides for a zero import tariff, as a way to stabilize the supply and prices of sugar 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 said the government is taking these array of measures to balance the interest of these producers with those of Filipino consumers.
This zero-tariff import arrangement was struck a day after Yap met with agriculture officials and industry leaders at the DA to map further ways to pull down the retail cost of sugar, which now averages P52 per kilo for refined white sugar from last year’s prevailing rate of P38 per kilo.
The Bureau of Agricultural Statistics reported that, as of Jan. 23, the prevailing prices are P52 per kilo of refined sugar and P44 for brown sugar. /MP
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