Philippines: SRA considers new sugar purchase program to stabilize prices
The Sugar Regulatory Administration (SRA) in the Philippines is considering a voluntary purchase program to stabilize declining raw sugar prices. Under the proposed plan, traders would buy raw sugar at prices above market rates in exchange for future import program participation rights. The program aims to reduce market supply and support prices. A similar initiative in 2023-2024 helped increase farmgate prices, benefiting farmers.
Manila: The Sugar Regulatory Administration (SRA) is exploring a new voluntary purchase program aimed at stabilizing the declining prices of raw sugar in the market, reported Philstar.
SRA Administrator and CEO Pablo Luis Azcona stated that the agency’s board is currently assessing the possibility of launching the program, which would encourage traders to buy raw sugar at rates higher than prevailing market prices. In return, traders would secure the right to participate in future sugar import programs.
“We are studying what we did last year and finding ways to improve it and make it a lot fairer to participate. (We want) anybody can participate as long as they possess a domestic trading license,” Azcona said.
The proposed program would classify the purchased raw sugar as “C” sugar, also known as reserved sugar, which would be temporarily held off from market circulation. This move aims to reduce the available sugar supply for sale, thereby supporting price recovery.
The SRA first implemented a similar initiative in the 2023-2024 crop year, successfully withholding over 260,000 metric tons (MT) of raw sugar from the market for up to three months. Under that program, eligible traders bought sugar at prices ranging from P2,700 to P2,800 per 50-kilogram bag, while the prevailing market price was around P2,500 per bag.
Following the implementation of the previous program, farmgate prices of raw sugar rebounded to above P2,700 per 50-kilogram bag, reflecting the program’s positive impact on market prices.
According to Azcona, multiple sugarcane planters’ federations have petitioned the SRA to address the falling farmgate prices of raw sugar. “(Agriculture) Secretary (Francisco Tiu Laurel Jr.) is also very concerned about the current sugar pricing since there is no oversupply but prices are declining,” Azcona added.
The SRA reported that the country’s combined raw and refined sugar stocks stand at around 450,000 MT, similar to the 406,000 MT recorded two years ago. Despite similar stock levels, current farmgate prices of raw sugar have dropped significantly. While prices exceeded P3,000 per 50-kilogram bag two years ago, they have now fallen as low as P2,400 per bag.
Azcona noted that current raw sugar farmgate prices are even lower than last year’s average price of about P2,600 per bag when the country’s sugar supply was at a higher level of over 750,000 MT. “The current pricing is at breakeven or even lower than the cost-to-produce of small-scale farmers,” he said.
To address this issue, the SRA has expressed support for any potential investigation by the House of Representatives into the declining farmgate prices of raw sugar. The agency acknowledged that falling prices have negatively impacted small-scale sugarcane planters and welcomed any effort to identify solutions.
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Source : Chinimandi
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