Revisiting the sugar saga

As a result, a serious supply shortage persisted, and by the end of 2022 prices had increased to more than P100 per kilo. The Department of Agriculture then approved the importation of 440,000 MT sans adherence to official procedures in importing sugar. Agriculture Senior Undersecretary Domingo Panganiban said that for the sugar importation, he had selected the three "most capable importers" to help reduce prices and help tame inflation. He predicted that once the imports arrived, prices would be between P80 and P85 per kilo. (Note that the landed cost of sugar imported from Thailand hovers around P40 per kilo.) This proved to be another broken promise. Current prices for raw sugar fluctuate from P86 to P90 per kilo while those for refined sugar are at P96 to P100.

From all indications, it is clear that despite the arrival of the imports, sugar prices will stay elevated. Why? For one, the shortage is real. Our calculation last year showed that the accumulated deficit is around 550,000 MT, broken down as: 200,000 MT of industrial grade sugar needed by bottling companies and food processors; 200,000 MT of refined sugar mainly used by consumers; and 150,000 MT of raw sugar also utilized by food processors and vendors. The situation must have worsened by now because we are far from the sugar harvest season (traditionally the second half of the year) and harvests this year might also be affected by the onset of El Niño.