Prices of sugar in the domestic market remained “relatively stable,” but reductions on tariffs with advent of free-trade agreements in the Asean region has greatly affected composite prices over the past three months, the Sugar Regulatory Administration (SRA) said on Thursday.
Asean is the Association of Southeast Asian Nations.
“There are no abrupt changes in the prices of sugar over the first months of implementation of tariff reduction. But admittedly, composite prices from mills is significantly lower as compared from the previous crop year,” Rosemarie Gumera, SRA policy and planning manager, said in a telephone interview.
The Philippines, as a signatory to the Asean Free Trade Area (AFTA), has started reducing tariff for the sweetener to 18 percent at the beginning of the year, from 28 percent a year ago. AFTA, which will take full effect in 2015, aims to bring down to zero the duties on products—including sugar—coming from Asean countries
“Right now, domestic demand for sugar is still strong, so the decline in prices remained tolerable. But we can not deny the fact that the free-trade agreement is now greatly affected our prices,” Gumera said.
Based on SRA records, the average composite price of sugar in March-May 2013 was pegged at P1,289 a 50-kilogram (kg) bag, significantly lower compared during the same period last year at P1,382/50kg bag. Gumera said that the sugar industry is now appealing for help from the national government to cushion the impact of the changing global market conditions for sugar products as a result of AFTA.
“We need to fast track initiatives to help Filipino sugarcane farmers to compete with highly subsidized farmers from neighboring countries,” she said.
Gumera said that the National Economic Development Authority (NEDA) has yet to approve their proposal to support research and development, upgrade farm machineries and construction of farm-to-mill roads (FMRs) that would impact on the profitability of
the sugarcane farms.
Under the proposal, the SRA official said that they would need at least P5-billion worth of government intervention to ensure that the industry is able to meet its production goals.
Of the total amount, P3.3 billion will be used for the construction of FMRs, P1.5 billion for farm mechanization and P250 billion for irrigation, she added.
“We are hoping that the NEDA will act fast on our proposal, and endorse it to the Department of Agriculture and Department of Budget and Management for the much-needed budget,” Gumera said.
Earlier, the Sugar Masterplan Foundation (SMF) lambasted the national government over lack of support, noting that the SRA has not been getting financial support from the appropriations.
“SRA is mandated to provide sugar for the domestic market, coupled with the goal of improving the income of the small farmers are, in itself, daunting tasks even with the participation of the private sector,” the group said.
James Konstantin Galvez