Millgate prices dropping, traders obviously controlling prices

Hopes  for sugarcane farmers to have a better Yuletide income have been dashed by erratic, often on the downside, prices of sugar, which obviously is being controlled by traders.

Sugar producers said millgate prices for their cane have dropped since the start of the milling season, with the United Sugar producers Federation (UNIFED) deploring a possible profiteering by traders.

“We fear that this continued downtrend will have a severe impact on our small farmers which comprise more than 80 percent of the industry producers who are looking forward to a better holiday season especially with the increase in production inputs due to the long drought,” Business World quoted UNIFED President Manuel R. Lamata’s statement.

UNIFED said prices averaged P2,500 per bag of sugar last week versus the P2,800 per bag farmers had been hoping for.

“Since the start of the milling season, prices have been erratically (fluctuating) contrary to the supply and demand figures, which raised suspicions that somebody is profiting from recent events,” Lamata added.

He said that despite the drop in millgate prices, the retail price for sugar remained stable.

He added that farmers should hold on to their sugar until prices stabilize.

“We may all need to tighten our belts so we will not be abused by these traders,” Mr. Lamata said.

The group also called on the Department of Agriculture and the Sugar Regulatory Administration to investigate the drop in millgate prices.

“We need the DA and SRA’s intervention to prop-up sugar prices at a comfortable level to prevent further losses especially now when there is also the issue of sugar purity, which has fallen due to the long drought,” he added.

The SRA had estimated that sugar production this crop year will drop 7.2% to 1.78 million metric tons.

He said the government could also move to buy sugar to stabilize prices.

“We will only sell directly Group seeks govt help to prop up sugar prices,” he said.

Meanwhile, the DAR ordered the SRA to roll out interventions that will halt the decline in sugar prices. 

UNIFED had appealed for such as it noted a “huge drop” in milling prices, which registered an average loss of P100 per 50-kilogram bag during the previous week. 

“This is artificial pricing. Somebody is playing with the market and an immediate intervention to curb downtrend in sugar prices is very much needed,” said Lamata.

UNIFED dared the DA and SRA to unmask the culprits who are “playing with us” as he voiced his suspicion that traders who wanted to profit big to the detriment of sugar farmers, noting that these people “should be exposed.

Despite the drop in mill prices, he noted that retail prices remain constant and will likely increase because of the upcoming holidays. 

“I am also rallying the farmers to hold on to their sugar until prices stabilize; we may all need to tighten our belts so we will not be abused by these unscrupulous traders,” Lamata said. 

“If the government will come in and hopefully start buying our sugar, we will only sell directly to the government and they can sell directly to the people, eliminating these traders until prices stabilize.”

The prevailing price of refined sugar in selected Metro Manila wet markets reached P80 to 100  per kilo in groceries and wet markets while washed sugar is being sold at P75 to P90, market surveys showed. 

Last month, UNIFED  urged the SRA to fasttrack the inspection of mills after its members reported lower sugar yield.

Lamata said he “questions the integrity of mills” due to the “doubtful results” related to the sugar yield of a 50-kilo bag per ton of cane (LKGTC) from the group’s members.

“We have had truckloads of canes which reportedly have zero LKGTC as extracted by the mills which makes us suspect that something strange is going on,” he said in a statement.

In the past, he said sugar groups were allowed to send their chemists to the mills to check the accuracy of their extractions. This practice, Lamata said, has been discontinued.

While the long drought would have a negative effect on LKGTC, Lamata said “the results so far have been suspect” as it urged the SRA to ensure that mill equipment are calibrated so as not to shortchange the farmers.