Sugar Prices Decline Despite No-Importation Policy

By Dolly Yasa

BACOLOD CITY – The recent assurance from the Department of Agriculture (DA) and Sugar Regulatory Administration (SRA) that no additional sugar imports will be made until the end of the current harvest season next year has failed to halt the decline in mill gate sugar prices.

This observation was raised by the Sugar Council and the National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP) in a joint statement provided to the Daily Guardian on Sunday.

The two groups cited a prior statement by Agriculture Secretary Francisco P. Tiu Laurel Jr., who said there is no immediate need for more sugar imports, as the domestic supply of raw and refined sugar remains stable and sufficient to meet projected demand.

“Given the current situation, [Sugar Regulatory] Administrator [Pablo Luis] Azcona and I agreed that a decision on sugar importation could be delayed until after May, when the current harvest season ends,” Laurel was quoted as saying on the DA website.

The groups noted that while the statement was intended to alleviate fears that additional imports would lower sugar prices further, it failed to address why prices have steadily declined in recent weeks.

At the Hawaiian-Philippine Company mill, sugar prices dropped from PHP 2,980.88 per bag for the week ending October 20 to PHP 2,815.99 per bag for the week ending November 10.

“That’s a price drop of PHP 164.89 per bag in only three weeks,” the groups noted. “In other mills, sugar prices fell to even lower rates as early as the week ending November 3.”

The Sugar Council and NACUSIP attributed the steady decline in prices to a drop in demand, urging the SRA to address concerns about an oversupply of both imported and locally produced sugar relative to market demand.

According to the SRA’s Supply-Demand Situation Report dated October 20, 2024, only 135,833.20 metric tons of the 240,000 metric tons of imported refined sugar authorized under Sugar Order No. 5 (Series of 2023-2024) had entered the market. However, mill gate prices were already trending downward.

A balance of 104,167 metric tons of imported sugar remains unutilized, classified as C-sugar, as per the Sugar Order. The groups questioned whether this classification will persist until next year, given the DA’s “no importation” stance.

The same SRA report showed that withdrawals for raw sugar decreased by 18.38%, while refined sugar withdrawals fell by 20.18% compared to the same period last crop year.

Refined sugar production also plummeted, with only 1,314 metric tons produced for the week ending October 20, compared to 58,990 metric tons during the same period last year—marking a 97% decline.

The groups noted that much of the locally produced raw sugar is typically withdrawn for refining. However, if there is already an excess supply of imported refined sugar, refineries see little incentive to withdraw raw sugar, reducing demand and driving down mill gate prices.

“The connection between drops in domestic demand, sugar prices, and the entry of imported sugar, along with sugar substitutes, is clear,” the statement read. “The claim that there will be no importation until the end of the harvest next year is a case of closing the stable doors after the horse has bolted.”

The groups argued that the fundamentals needed to stabilize prices remain absent, rendering the “no further importation” announcement ineffective in halting the price drop.

The Sugar Council reiterated in its July 18, 2024, letter to Secretary Tiu Laurel that there was no need for imports under the then-proposed Sugar Order No. 5, as existing stocks were projected to last until December 2024.

The statement also raised concerns about the growing use of artificial sweeteners in the beverage industry, including sucralose, aspartame, and acesulfame potassium. Sucralose, they noted, is 600 times sweeter than sugar, while aspartame and acesulfame potassium are 200 times sweeter.

The total importation of these sweeteners increased from 950,989 kilos in 2022 to 1,100,783 kilos in 2023.

“In our September 16, 2024, letter to Secretary Tiu Laurel, the Sugar Council and NACUSIP sought the DA’s assistance in assessing the impact of artificial sweeteners on the consumption of locally produced sugar,” the statement added. “Aside from the SRA increasing import clearance fees for high-fructose corn syrup, we are still awaiting the requested data.”