CONSISTENTLY increasing sugar prices is a ticking bomb that should not be ignored.
The Sugar Regulatory Administration (SRA) website showed that the cost of sugar in the market has been consistently rising. In February 2023, the average price of refined sugar was P104.45 per kilogram, which increased to P136 per kilogram in just two months. A shocking 30% surge.
Compared to the price two years ago, a kilogram of refined sugar was priced at P53, making the current increase an alarming 156% in just a little over two years.
The Department of Agriculture (DA) approved the allocation of 440,000 metric tons (MT) of refined sugar to three handpicked companies last February. They were given the condition to reduce the prices of sugar and cover the costs of warehousing to lower the selling price of sugar in the domestic market. However, according to Acting SRA Administrator Pablo Azcona, only 179,000 MT of sugar arrived before April 1, with only 86,000 MT released for domestic distribution. This figure accounts for only 43 percent of the sugar supply intended for consumers, which apparently is not enough to arrest the skyrocketing prices in public markets.
Indeed, the current prices of sugar in the local market are far from what Senator Risa Hontiveros believes they should cost Filipino consumers. Her office estimates that imported sugar from Thailand should only cost P65 per kilogram.
The impact of the escalating sugar prices is far-reaching. Consumers will be greatly affected, with refined sugar being a key ingredient in many everyday products, including bread, pastries, and beverages. If the price of sugar continues to increase, it could trigger a rise in the cost of many of these products and bring suffering to the already struggling average Filipino.Businesses that rely on sugar, such as bakeries, confectioneries, and beverage manufacturers, will also be affected. They may have to cut costs elsewhere, leading to layoffs, disruptions of operations, or in worst-case scenarios, face closure. The ripple effect caused by spiraling sugar prices will be felt across the national economy.
To make matters worse, the El Niño phenomenon now being experienced by the country will surely exacerbate the situation. This makes government action on the matter even more urgent.
Promoting transparency and accountability in the sugar industry is one way that the government can address this issue. The alleged existence of a sugar cartel—after the government only allowed three companies to import sugar—as raised by Senator Risa Hontiveros, further underscores the need for more transparency.
The government should ensure that there is healthy competition in the sugar market by allowing more sugar importers to enter and compete. Healthy competition from additional importers will deter the formation of an unwanted cartel. More sugar importers will also ensure a steady flow of the product into the country, both for industrial and household users.
There is also a clamor to allow industrial users to import the important commodity directly for their use. Manila Representative Benny Abante and Senator Koko Pimentel support this call.
Allowing industrial users to import sugar directly for their needs will also reap benefits not just for the manufacturing sector. Firstly, it would stabilize the price of sugar in the market, as household consumers would no longer have to compete with industrial users.Secondly, with improved supply and stable sugar prices, sugar-related businesses such as bakeries and food manufacturers can enjoy more stability, preventing the need to lay off employees or close shop.
There is still time to avert this looming crisis that threatens the lives and stability of millions of Filipinos. Now is the right time for the Marcos administration to protect and preserve the interests of all stakeholders.