Sugar prices remain high in Metro Manila

MANILA, Philippines – The prevailing prices of sugar in Metro Manila remain high as demand is still strong, the Sugar Regulatory Administration (SRA) said Monday, June 16.

Contributing to the high prices is the fact that sugar producers have only started converting sugar intended for the world market to domestic sugar.

As of June 6, the average wholesale price of raw sugar was placed at P1,838 per 50 kg bag, the same as the prevailing prices in the last week of May. 

Also on the same period, the average wholesale price of refined sugar was placed at P2,306 per 50 kg bag, slightly higher than the average price of P2,300 per 50 kg bag in the last week of May.

The average retail price of refined sugar in Metro Manila was P50.55 from the same period, up from P49.50 in the last week of May.

“Demand remains high and sugar producers have only begun converting sugar,” SRA Administrator Ma. Regina Martin said.

“Retail prices have risen slightly but this will be lowered soon because we have reallocated world market sugar to the domestic market,” Martin added.

Martin said the abundant production due to good weather conditions has already lowered the average millsite prices to around P1,650 from P1,700 in the last week of May.

Arresting price spike

Earlier this month, SRA had cleared the conversion of 90,000 metric tons (MT) of world market sugar to domestic market sugar to arrest rising prices believed to have been caused by speculations of supply tightness at the end of the crop year in August.

The conversion rights granted to sugar producers must be used by Tuesday, July 1, or would be rendered invalid.

Martin said the SRA is monitoring the increase in retail prices and would submit a recommendation to the Department of Trade and Industry (DTI) to impose appropriate sanctions against traders that are raising prices unreasonably.

“These retailers would be asked to show cause for raising their prices,” she said.

Martin earlier said the SRA board may pass another conversion order if needed.

“We need to observe the market and monitor with some reserve volume,” Martin said.

Sugar contributed P70 billion or roughly $1.59 billion to the national economy in 2012, according to SRA. But coconut oil replaced sugar as the country’s top agricultural export.

The U.S. is a top market for Philippine sugar because prices of sugar in America would normally run around 35 to 45 US cents a pound, while prices of sugar in the world market fetch about 18 to 20 cents.

The Philippine sugar industry will no longer be protected by a tariff wall when the free trade agreement under the Association of Southeast Asian Nations (ASEAN) goes into effect in 2015.

Philippine government tariffs on raw and refined sugar imports are supposed to drop to 5% in 2015 from 38% in 2010.

Thailand, an ASEAN member, is the second largest exporter of sugar in the world after Brazil. – Rappler.com