Concern raised as sugar prices drop

Sugar industry leaders alarmed over the plunge in sugar prices below P1,000 per Lkg yesterday called the situation “very bad”.

“We are now feeling the pinch of the global economic crunch, we are faced with a horror movie that will last until the end of this crop year,” Manuel Lamata, president of the United Sugar Producers Federation of the Philippines Inc., said.

The prices yesterday were way below planters’ production cost of P1,150 per Lkg, that rose amid soaring fertilizer and fuel prices last year, he said.

Government should instruct its banks to begin quedan financing to enable the planters to hold on to their quedans so they don’t have to sell their sugar at very low prices, Lamata said.

His call for quedan financing was supported by Reynaldo Bantug, Confederation of Sugar Producers Association-Negros Panay chapter president.

Bantug said the prices may have dropped amid the environment of economic uncertainty and he hopes it will improve with the shipping out of the country’s “D” or world marker sugar.

The prices this week ranged from P950 to P990 per Lkg for B sugar, he said.

“The situation is very bad, even the more efficient planters are barely breaking even, a lot of people are crying, a lot are losing,” Bantug said.

“The global economic crunch is bound to lower consumption and demand for sugar, we definitely need to tighten our belts now,” he said.

“The situation is bad for all of us especially the small planters who have to sell their sugar quedans every Friday to sustain their operations,” Enrique Rojas, president of the National Federation of Sugarcane Producers, said.

The Sugar Regulatory Administration and the Philippine Sugar Alliance should appeal to the President to immediately stop sugar smuggling and also hasten the shipping out of the A (US) and D (world market) sugar to decongest our sugar stock, Rojas added.

Rojas has blamed sugar smuggling for the current over supply of sugar in the country that is dampening the price of domestic produce.

Rafael Coscolluela, SRA administrator, said the drop in prices has been caused by market forces at work plus a little uncertainty. Raw and refined sugar inventory are competing with the new crop but stocks are moving well and that is a good sign. “I think we are seeing the bottom now,” he said.

Meanwhile, sugar cooperative leaders, angry over the Bureau of Internal Revenue imposition of Value Added Tax on their refined sugar, said they are preparing to seek a Temporary Restraining Order on the BIR.

“We will file for a TRO when BIR Revenue Regulation 12-2008 takes effect on Oct. 22,” Fr. Armando Onion, chairman of the Ma-ao Parish Multi Purpose Cooperative Inc., said yesterday.

Onion maintains that sugar cooperatives are exempt from taxes that will only burdens further the already suffering sugar industry.

“The new BIR regulation makes it even for difficult for sugar cooperatives to avail of tax exemptions,” he added*CPG
SOURCE:visayandailystar