The Philippines produces about 24 million tons of sugar cane annually. This makes the country an important supplier to the global sugar industry. However, it remains to be seen whether this will remain the case in the coming years. Sugar cane producers are burdened by the sky-high production costs.
Fertilizer and oil prices are skyrocketing. Recent we already wrote that the price for KAS 27% is no less than €63,30 per 100 kilos and the price for potassium 60 does not fall below €55 per 100 kilos. Yet the high price in our country has no direct effect on demand. The biggest challenge is delivering the product on time. The Philippines experiences this differently. The price for urea, the fertilizer used by farmers there, has risen over the past year and a half from €31,28 per 100 kilos to €80 to €84 per 100 kilos. In addition, the price of oil has almost doubled in the past eighteen months.
However, sugar cane producers can hardly cope with the above price increases anymore. The problems are especially great in the most important region, the plantations in Negros Occidental. This area represents 53% of the sugar cane area and the province contributes approximately €1,56 billion annually to the national economy. The only solution is to increase sugar prices and that is already reflected in domestic prices. On January 16, the local equivalent of €66,90 per 100 kilos was paid. One year earlier that was €51,74 per 100 kilos. At the same time, the wholesale price for raw sugar rose by 14,7% to €67,80 per 100 kilos and refined sugar rose by 25,5% to €93,88 per 100 kilos.
National intervention required
The sugar industry called on the Philippine government for national intervention months ago, but so far no concrete action has been taken by the Department of Agriculture or the Department of Trade and Industry. The call for a price ceiling for artificial fertilizer and other fertilizers has also not yielded any results so far. The situation is urgent, say sugar producers united in United Sugar Producers Federations. “The harvest season has reached its peak and planting for the new season is about to begin.”
In a letter to the ministries, they write: "The situation must be addressed before it gets out of hand. How can small farmers survive if the price for fertilizers, fuel and other inputs is the same, or even higher, than the price of their Products?" At the same time, there are many complaints from the country about the rising sugar price. "That price is simply necessary to continue cultivating the sugar fields." It remains to be seen whether the ministry will take action. To date, there has been no official response.
If nothing is done about the high input prices, the question remains whether the Philippines can maintain the rising trend in sugar cane production.