SUGAR PRICES dipped last week. This was quite a problem because while all food commodity prices went up, foremost of which was rice, that of sugar went down.

The May 8 quotation was as follows: Victorias, P1,195 for “B;” Hawaiian-Philippine was P1,162.62; La Carlota, P1,143.62; Biscom, P1,150.08; Capiz, P1,155; Bais, P1,170. The average of “B” or domestic sugar was P1,167 per lkg.

This came in the wake of the conversion made by SRA Administrator Rafael Coscolluela of “C” or reserve sugar into “B” or domestic sugar.

In short, with the conversion where the reserve sugar was released to the local market, the market was flooded with sugar, causing the prizes to go down.

* * *

There were many discussions. Planters faulted SRA for converting into domestic the reserved sugar. I recall SRA countered that it was the supply and demand.

Both are right. What depressed the price was the flooding of the market.

What was not discussed and fully argued was the question, was the conversion done at the right time?

Let the public understand that upon milling sugar is classified into “A” or sugar allocated for the U.S. market; “B” or sugar for the domestic market; “C” or sugar for reserve; and “D” or sugar for the world market.

“D” sugar is allocated to stop sugar prices from rising too high beyond the reach of the consumers. It is also used when we are short of the shipment to the U.S. or when we need to ship to the world market.

* * *

I have covered the sugar industry as a newspaperman for some 50 years. In all these years, I have seen how conversion was  the source of alleged corruption. And the agency handling this before Martial Law was the Sugar Quota Administration, then the Philippine Sugar Commission, and now the Sugar Regulatory Administration.

Sugar administrators then would give a big allocation to “C” or reserve which had the least price because it could not be used unless converted. Then when the price of “B” or “A” or “D” went up, these were converted.

The traders here raked in plenty of money having bought the sugar at a very low price, then selling it at a very high price.

The suspicion then could not be proven, the reason why no one was jailed, was that this was with the manipulation of the traders who would share the booty with the proper people making the conversion.

* * *

Because of these experiences in the past, whenever there is conversion, suspicions would arise among the planters.

This same question has been asked because of this conversion, especially because as charged by the planters it was done without consultation with the Sugar alliance, composed of the four federations of sugarcane planters and the millers.

That was what the planters said. I don’t know if Lito Coscolluela really consulted the Sugar Alliance.

I trust the honesty and straightforwardness of Lito Coscolluela but he cannot stop people from suspecting. Especially in the absence of a plausible reason to explain why sugar prices went down.

* * *

I read in the news that NFSP president Nene Rojas opposed the conversion. I have not asked Rojas yet. I also do not know if, before SRA converts, it is a must to consult the Sugar Alliance. Or is it just a courtesy.

What I know is that last April 23, the Sugar Alliance passed a resolution strongly recommending that SRA defer the conversion of  “C” to “B” sugar if the price of “B” falls below the P1,200 mark.

And they also asked SRA that it be consulted on future conversion plans prior to the issuance of a Sugar Order as discussed during the Alliance monthly meeting on Feb. 20, 2008.

The resolution was signed by four planters federations, Rojas of NFSP, Francis  Treñas of Panayfed, Manuel Lamata of Unifed, and Francisco Varua of the Philippine Sugar Millers Association.

Confed did not sign the resolution.

* * *

What I understand in talking with some planters was that, originally, it was agreed SRA could convert “C” if prices would reach P1,200 per lkg. The price went up to P1,200 a week before last.

But the planters said, the price in the market was P2,000 per lkg or a gap of P800. So, they asked that it be allowed up to P1,300 per lkg before converting.

But SRA converted before reaching the level of P1,300.

The story I got was probably not complete and probably lacking the other side. I will be happy to hear the version of SRA.

The problem we have now is not as bad as years ago when the amount of sugar converted was big. And there was conversion, not only from C to B but also from B to A, A to B, D to B, and so forth.

Every time there was conversion there was big money because conversion was made because of the high price of sugar being converted to.

* * *

I got some questions, what really has been transpiring behind the political backdoor? I wrote, I have not been privy to political goings-on.

The only thing to remember is in  politics, anything can happen. And I believe it is for the good of the two political leaders Evelio Leonardia and Monico Puentevella if they keep on ranting at each other but at the back they are holding each other’s hands.

But, they must vehemently deny this. The political fortune of each is because of the conflict with the other. This will be a sad Bacolod if there is no more conflict.

Meanwhile, two Bacolod cities and three Congressional seats? Not a bad idea but can this be done?

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3 Responses to “Problems in sugar conversions”

• 1
  Dr. Antonio Gestosani
  May 15th, 2008 21:15

  Wow!! This is felonious act of market manipulation. Here in the States, these big fish go to jail. Jeffrey Skilling of Enron and Martha Stewart went to jail for market fraud. Where is the Security and Exchange Commission equivalent body in the Philippines to protect the public against the unscrupulous practice of the CEOs of big companies? This again is the big problem in the Philippines because everybody knows what is going on but nobody cares, and nobody do something about it. Where is the media? Where is the special prosecutor? Where is the congressional enquiry? Where is justice? Again, you tolerate this practice and it will only perpetuate to hunt you.
• 2
  nester
  May 16th, 2008 10:48

  I agree with you doc, this happens because most of our laws have been tailored for the rich
• 3
  Dr. Antonio Gestosani
  May 16th, 2008 21:00

  Nester, this is exactly my point; your law favors the rich is just a myth. The big problem is, there is no strict implementation of the law. Nobody gets jailed. So, you can get away with murder in the Philippines. Politicians and there cronies are the most privilege animals; they can play dirty at there whims. Why? Because they own you. Remember there are 150 families that play this game in the Philippine out of 82 million Filipinos. They manipulate the politics, the economy and they get richer by the minute. Remember my friend, power is money, and money can buy anything.

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