Notwithstanding news of Customs agents’ almost daily raids on warehouses that yield sugar allegedly smuggled, or probably being hoarded, the nagging question is, if the sugar shortage is real, how bad is it?
“Our current sugar crop production is down to 1.8 million tons… The La Niña effect (more storms, above-normal rainfall) has exacerbated the deficit,” Jose Mari Chan, the singer who owns a sugar milling business and is an officer of the Philippine Sugar Millers Association, told Daily Tribune in a text message.
The PSMA website says it “consists of 16 mills which produce 78 percent of the total Philippine sugar production… It carries considerable weight in policy formulation in the industry in conjunction with the Sugar Regulatory Administration.”
Ordinary Filipinos might be surprised to know there is a problem, although they’re the ones to directly feel its effect — especially one day in August when they woke up to find sugar, which they used to buy at P57 to P60 a kilo in February, suddenly cost P100.
To understand the situation, a little history:
In the Philippines, the large-scale planting of sugarcane, the raw form of sugar, started in the 1700s during the Spanish colonization.
It became big business in the mid-1800s with the proliferation of sugar plantations in Luzon and the Visayas.
The crop soon comprised the country’s top export to the United States during the American period in the 1900s. This went on even after the Philippines gained independence from the US in 1945.
It is said that the country exported over half of its sugar output to the US.
However, in recent years, sugar exports declined due to low farm productivity and higher domestic demand.
What’s more disconcerting is, Philippine protectionist policies, coupled with inefficient farming methods, have led to the country selling its sugar at a price higher than other countries.
The price of Philippine sugar was double the world price and Thai export prices in 2019, said the paper “An Assessment of Reform Directions for the Philippine Sugar Industry,” which the National Economic and Development Authority published in 2021.
In 2020, only 27 sugar mills were operating in the country. The reason is expense — at least P2 billion is needed to build a new factory with facilities for large-scale sugar production.
NEDA said the problems confronting the sugar industry are: Fragmented land ownership; lack of improved cane varieties; poor soil quality; inadequate irrigation; labor shortages; low farm mechanization; and inadequate financial capital.
Nonetheless, the sugar industry remains a major cog in the Philippine economy, contributing P86 billion annually.
According to NEDA figures, 500,000 people work in sugar farms.
Sugar is the fifth largest crop by value — after rice, bananas, corn, and coconuts. Total production of sugarcane reached $815 million in 2020.
The irony is, the percentage of sugar’s share as an agricultural gross domestic product was a mere 1.9 percent in 2018.
Contradictions aside, those in the sugar business have been sounding off the alarm of a serious supply shortage in the coming months, even as ordinary consumers talk among themselves.
A 59-year-old health-conscious executive told his wife, “If too much sugar causes diabetes, and one of the culprits is drinking too much soda or soft drinks, aren’t we supposed to feel glad that people will feel better with this sugar crisis?”
The wife replied: “Hahaha, but of course you know the problem is much more complicated than that.”