The domestic price of sugar plummeted below P1,300 per 50-kilogram bag (LKg), as traders are wary of the possible decline in demand for it once Congress approves the proposed tax on sugar-sweetened beverages (SSBs).
Philippine Sugar Millers Association Inc. (PSMA) Executive President Francisco D. Varua said the mill-site price of “B” sugar, or those for domestic consumption, declined by 5.48 percent to P1,276 per LKg as of November 8.
“Traders just buy what they can sell to the market as they are trying to read what exactly the situation would be [next year],” Varua told the BusinessMirror in an interview. “They want to find out the impact of the tax on SSBs.”
Even as the Christmas season draws nearer, Varua said traders are not buying as much as they did last year, when the price of “B” sugar reached P1,500 per LKg.
“We hope the price of sugar would recover within the next two to three weeks. But we are still awaiting the final version of the Tax Reform for Acceleration and Inclusion [TRAIN] bill,” he said.
The TRAIN, the first package of the Duterte administration’s tax-reform program, is originally targeted for implementation in January. Among its features is a levy on sugary drinks.
Earlier, stakeholders in the sugar industry said imposing an excise tax on SSBs could cut the demand for sugar, as sweetened drinks could become more expensive.
Data from the Sugar Regulatory Administration (SRA) showed the mill-site price of “B” sugar at the start of crop year 2017-2018 reached P1,376 per LKg.
Since the start of October, however, the price of “B” sugar started to decline and fell to P1,357.16 per LKg on October 15.
Varua said he is now doubtful that the price of “B” sugar would rebound and reach P1,500 per LKg by December, as what his group had earlier projected.
SRA data also showed the country has produced 137,241 metric tons (MT) of raw sugar as of October 29. The volume is 7.31 percent lower than the 148,060 MT recorded in the same period last year.
Total volume of sugarcane milled as of October 29 was also lower. SRA data showed sugarcane milled so far in the current crop year declined by 8.29 percent to 1.669 million metric tons (MMT), from last year’s 1.820 MMT.