"DISPOSE for markets to sell at P70 per kilogram, or we'll see you in court."

Mobilizing several different agencies, the Ferdinand R. Marcos Jr. administration has raided and found in several warehouses mainly in the National Capital Region and a few other provinces 401,000 50-kg bags of sugar. If half of these were raw sugar (P3,200 per bag) and half refined (P4,500), this hoarded sugar would be worth P821 million.

The figure would likely pass P1 billion when reports after "inspections" in other warehouses in the Visayas come in, government officials said.

The raids were undertaken, jointly and separately, by the Bureau of Customs, using its visitorial powers on warehouses keeping imported commodities, aided by the National Bureau of Investigation, the military's intelligence service, and even the Presidential Security Group.

Government officials said all evidence points to sugar traders' hoarding of the commodity to artificially push up prices in the past several months to even reach P110 per kg retail, more than double that of the previous year. Nearly all of the warehouses had bags of sugar nearly filling up the entire floor space and almost reaching the ceiling.

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REPORTS OF GOVERNMENT INSPECTION TEAMS
REPORTS OF GOVERNMENT INSPECTION TEAMS

Sugar nearly reaching the ceiling in a warehouse on C-12 that was inspected the other day. GOVERNMENT PHOTO
Sugar nearly reaching the ceiling in a warehouse on C-12 that was inspected the other day. GOVERNMENT PHOTO

The Marcos administration stumbled into discovering — for government for the first time in decades it seems — how sugar traders have managed to manipulate sugar prices to push them up to more than double their cost, which is to hoard them.

Sugar order

Executive Secretary Victor Rodriguez and Marcos himself were reportedly appalled when the three-man Sugar Regulatory Board on August 9 issued Sugar Order 4 authorizing the importation of 300,000 metric tons of sugar. The President had not authorized this as his executive secretary was in fact still discussing the issue with the SRA board. Then Agriculture undersecretary Leodico Sebastian surprisingly, even without Marcos' authorization, signed on behalf of the President in issuing the order.

The SRA's rush to issue the import order for such a huge amount of sugar raised Malacañang's suspicions, since about a third of the 200,000 MT importation authorized earlier in the year under Sugar Order 3 had not yet been released to the local market. The sugar milling season is also about to start, which could make the 300,000 MT imports unnecessary.

One reason for the rush reportedly was to provide a cover for unscrupulous sugar traders who had been hoarding, or worse, had smuggled sugar, and therefore had no documents to prove these were under the earlier Sugar Order 3.

High government sources disclosed that rather than persecuting the trader hoarders, which would require a lot of time and resources to pursue, they were instead given an ultimatum: "Either we file criminal charges against you and have your sugar impounded until it rots, or you dispose of it in the market so consumers can buy it at the very least at P70 per kilo." Marcos himself met with the owners of the big supermarkets to ask them to deal with the traders with that aim in mind, and report back to him if they hadn't.

Senior

Domingo Panganiban, the recently appointed "senior undersecretary" at the Agriculture department, also said the other day that the retail price of refined sugar could go down to as low as P60 per kg following the discovery of hoarded sugar stocks in warehouses.

"We expect to bring down the retail price of refined sugar to between P60 [and] P65 per kg. We have enough sugar supply following the discovery of thousands of stocks in Bulacan and Pampanga," Panganiban told a news briefing. He said the raids would be expanded to include warehouses in the Visayas and Mindanao where sugar is believed to be hoarded. Panganiban said the government and several supermarkets were able to secure at least 1.8 million bags of sugar from Victorias and Universal Robina Corp.

If sugar hoarders who lobbied for the rushed issuance of Sugar Order 4 thought it would give them the cover to dispose of their stocks at a high price, things turned out to be a huge blowback for them. Their sugar hoarding practices have been exposed and with that revelation, I hope government will put in place checks to prevent such hoarding.

"It is the first time that this very bad practice of sugar hoarding has hit the front pages, even if this is something which has always affected us," the head of a conglomerate reportedly told Executive Secretary Rodriguez. "That would help prevent such hoarding in the future."

Spotlight

The issue has also thrown a strong spotlight on the Philippines' sugar quagmire, whose state is certainly far, far from being sound. The industry has been so inefficient — from the planting side to the milling that countries like Thailand produce sugar at half the Philippine cost. That world prices are low is a permanent incentive for smuggling sugar, or fooling government into thinking that there is a shortage so imports are necessary.

But what do we do with the 70,000 sugar farmers, now mostly operating small areas almost at break-even cost, if we force them to stop production, and let the country buy all its sugar from abroad, as the worshipers of the God Free Market are propounding? There is undoubtedly a small sector of sugar planters that has historically been affluent and exploitative hacenderos. But many sugar farmers are now becoming impoverished, helpless against the prices set by millers and traders.

It is certainly not coincidental that the main forces of the Yellows came from the sugar hacendero elite of the sugar-producing Negros and Iloilo islands.


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