PH sugar crisis a 'state-sponsored monopsony': lawmaker

ABS-CBN News

Posted at Sep 14 2022 03:54 PM | Updated as of Sep 14 2022 05:42 PM

A sugar vendor at the Bagong Silang public market in North Caloocan on Aug. 11, 2022. Jonathan Cellona, ABS-CBN News
A sugar vendor at the Bagong Silang public market in North Caloocan on Aug. 11, 2022. Jonathan Cellona, ABS-CBN News

MANILA — The high cost of sugar in the country is a result of a "state-sponsored monopsony," a lawmaker said Wednesday.

A monopsony is a market situation where there is only one buyer of a product, or there is one buyer that dominates the market and can control the price of a product.

According to Albay 2nd District Rep. Joey Salceda, the retail price of sugar, which is being sold in some markets at P120 per kilo, is "artificially high".

"It is a state-sponsored monopsony. In other words, all you have to do is to get SRA (Sugar Regulatory Administration) out of the way [and] prices will collapse to P40," he told ANC's "Headstart".

The SRA, an attached agency of the Department of Agriculture, is tasked to issue permits for the importation of sugar.

To bring down sugar prices, Salceda proposes auctioning off the shortage of sugar supply to farmers.

"Why don't we just impose an auction fee for those who want cheaper sugar from Thailand or India," he said.

For example, sugar can be bought at P16.67 per kilo in Thailand, he added. Salceda said "world sugar prices are coming down but domestic prices are rising and the differential has been growing." 

The lawmaker said there is currently a 400,000 metric ton shortage of sugar supply in the country this year.

The SRA has authorized the importation of up to 150,000 metric tons of refined sugar to augment the country's supply.

Half of the sugar to be imported will be for industrial use, while the other half will be for consumers, according to Sugar Order No. 2. 

Sugar importation recently made headlines after the previous SRA board authorized the importation of 300,000 metric tons of sugar, which the Palace later nullified.

The issue prompted legislative probes and the resignation of several members of the SRA.

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