Not so sweet times for Filipinos
Sugarcane is one of the main products of the Negros region. (Photo: PhilStar)
Filipinos love sweets. It’s evident in the various homegrown desserts and snacks that must always be on our tables. Sweet and savory is also a common flavor combination: Tocino, barbeque sauces, banana ketchup. We even put cups of sugar into our spaghetti. As much as we love asim and anghang, tamis has grown in popularity among Filipino consumers over the years.
But sad to say, there’s bad news for my fellow sweet tooths: A sugar crisis that’s been looming over the Philippines has now taken root.
Like most consumer goods, sugar prices have been skyrocketing for months. July’s 6.4% inflation was driven by the price increase in food and non-alcoholic beverages, which went up from 6% to 6.9%. One of the products which greatly contributed to this? You guessed it—sugar-heavy products like bread and baked goods.
Sugar, we're going...somewhere
The government has been warning of a sugar shortage for months. Supertyphoon Odette, which struck the Visayas in 2021, hit just as the sugar milling season was peaking. Negros Island, the biggest producer of sugarcane in the Philippines, suffered P1.15 billion worth of damage to its sugar industry.
We’re still feeling the effects of that today. From January to March of this year, sugarcane production went down by 10.1% compared to the same months last year. Erratic weather conditions and high production costs brought on partially by the Russia-Ukraine war resulted in missed production targets.
To meet local demand, the Philippines now has to import almost 300,000 metric tons of sugar. Additionally, the agriculture, forestry, and fishing sectors contributed the least to the country’s gross domestic product for the second quarter of 2022. Not great for a country that wants to call itself agricultural.
Several supermarkets and wet markets have already priced refined sugar at over P100 per kilo as of Saturday. Washed sugar was priced at P75 per kilo and brown sugar at P70 per kilo late last week as well.
What do all these numbers mean?
For the food and beverage industry, it means sacrificing profit or taste, or sometimes both.
Street food vendors hiked up their prices and pulled back on the amount they use in order to recover costs. The rising cost of flour and eggs has also made baking more expensive. Some bakeries have been reducing the size of their pastries since July to the ire of their patrons. But for many of them, it’s adjust or go bust.
"We don't want to increase prices pa rin naman even though tumataas ang presyo ng sugar (We still don't want to increase prices even though sugar prices are rising),” said Resto.PH President Eric Teng. “We would try to absorb it as long as we can."
Restaurants are feeling the crash too as sugar remains an essential commodity for cooking.
"Kaya lang ang problema nga, kapag may kulang sa sugar, the taste of certain food items may not be the same," Teng added.
(The problem is if there is a lack of sugar, the taste of certain foods may not be the same.)
Local sugar producers are also bearing the burden of missed harvests, high fertilizer costs, and underdeveloped infrastructure. Outdated systems continue to plague farmers. Earlier plans to import 200,000 metric tons of refined sugar were stopped after groups called foul on the timing of the volume and a sudden 10% drop in prices. These prices would have dealt massive losses on small farmers.
Negros producers recently called on the government to reclassify sugar for importation and instead mark it for domestic consumption to ease local supply problems. The Philippines currently exports part of the produced sugar to the United States. This issue adds onto the long-running tension between Filipino sugar producers and the Sugar Regulatory Administration.
What price is right?
To mitigate soaring prices, the Department of Agriculture (DA) and Department of Trade and Industry (DTI) are considering setting a suggested retail price (SRP) of P90 per kilo for sugar. Setting an SRP can keep prices fair among sellers and can protect consumers from overpriced products.
When pork was incredibly expensive due to supply concerns from African Swine Flu, the SRP for imported pork was set at P270 per kilo and P350 per kilo for kasim and liempo, respectively. Last January, the cost of bread also went up by almost P3 following the evaluation of flour and wheat prices.
SRPs set by manufacturers have to be evaluated by the DTI prior to being imposed on consumers. That’s why butting heads can be inevitable. In March 2021, hog raisers appealed for higher pork SRPs to give them more flexibility.
Imposing SRPs on sugar could help regulate prices, but the DA and DTI must be able to consult with all parties affected, including farmers. Experts have pointed out that erratic prices from suppliers won’t be enough to implement SRPs. They’d have to find ways to lower operating costs as well.
As of August 4, the existing supply of raw sugar in the country will only last us until August 19. Stopgap solutions like SRPs and imports can only take us so far before another crisis hits. Something tells me the worst is yet to come for the food security plans of President and acting Agriculture Secretary Ferdinand Marcos Jr.
