THE Sugar Regulatory Administration (SRA) said that it is considering a sugar purchase program to prop up declining millgate prices.
SRA Administrator Pablo Luis S. Azcona said that the direct purchase of sugar from farmers is one of the options to address the recent drop in the millgate price of raw sugar.
“We just have to find a way to ensure stable supply to keep millgate prices steady,” Mr. Azcona told reporters.
Mr. Azcona said that three sugar producer groups have called for intervention in light of the low millgate price.
The SRA had called on traders to voluntarily purchase domestically produced sugar to stabilize farmgate and retail prices. Participants will be eligible for allocations in a future sugar import program.
“We will talk with the Department of Agriculture on the possible (solutions). Voluntary purchase and putting sugar in reserve is of course one of the things that we are thinking about,” he added.
Mr. Azcona said that producers are breaking even at the current millgate price or could be suffering losses.
“As I said, we no longer follow supply and demand. The supply numbers are far behind, the supply numbers have a bigger difference than the demand difference,” he added.
He said that sugar supply has declined in response to the drop in production.
According to the SRA, as of Dec. 1, the raw sugar inventory was 171,736 metric tons (MT), while refined sugar stocks totaled 308,554 MT.
The SRA has estimated that sugar production this crop year will drop 7.2% to 1.78 million MT. — Adrian H. Alternate
