What It Means
- The sugar buying program is being revived with calls for a larger budget than the original ₱5 billion allocation, after sugar industry players unified at the SRA office in Bacolod on March 10, 2026.
- Farmgate prices for raw sugar have dropped to ₱2,100 to ₱2,400 per 50 kilo bag, well below the estimated production cost of ₱2,500 or more.
- A government mandated floor price for both farmers and millers is now part of the proposal, which would convert the Philippine sugar market into a fully state managed pricing system.
- Food businesses, bakeries, and beverage MSMEs that depend on affordable sugar are not represented in these discussions, and will absorb the cost of constrained supply and elevated domestic prices.
- The push comes alongside an import ban extended through December 2026, creating a policy environment where the government simultaneously restricts supply, sets price targets, and funds procurement.
The Philippine sugar industry wants the government to buy its product, set a minimum price for it, and keep foreign sugar out of the country all at the same time.
On March 10, sugar federation leaders, millers, the SRA Board, and labor representatives from Luzon, Visayas, and Mindanao gathered at the Sugar Regulatory Administration office in Bacolod City. SRA Administrator Pablo Azcona described the meeting as a milestone in public private cooperation. The group reached a consensus to ask Malacañang to revive and expand the sugar buying program first launched in 2024 with a ₱5 billion budget from President Ferdinand Marcos Jr.
The Confederation of Sugar Producers Associations (Confed) presented a case for a bigger allocation this time. All participants will submit formal recommendations to the SRA, and the group is preparing letters to President Marcos that will be endorsed through the Department of Agriculture.
The sugar buying program is not a new idea. The SRA has run voluntary purchase programs for three consecutive crop years. In 2023 to 2024, traders bought 300,000 metric tons of raw sugar. In 2024 to 2025, the program covered 500,000 MT under Sugar Order No. 2. For the current crop year, the Manila Bulletin reported that the latest version would cover up to 400,000 MT, with purchased sugar classified as “C” or reserve, kept from market circulation for 90 days.
The mechanics are worth understanding. Traders who participate in the sugar buying program purchase domestic raw sugar at a premium. In return, they get priority access to future import allocations. That means the incentive for buying local sugar at above market prices is the right to import cheaper foreign sugar later. The program rewards capital holders who can afford to lock up inventory for three months while smaller buyers get squeezed by reduced circulating supply.
The Floor Price Proposal Changes the Game
What is new this time is the floor price proposal. Azcona confirmed that discussions included establishing a government mandated floor price for sugar produced by both farmers and millers. If implemented, this would mean the government controls who can import sugar (the import ban), how sugar is classified and stored (the reserve system), and what minimum price sugar must trade at (the floor). That is not price stabilization. That is a state managed commodity market.
Farmgate prices tell the story of why the industry is pushing so hard. SRA data from late 2025 showed raw sugar prices fell 7.7 percent year on year to around ₱2,363 per 50 kilo bag. By December, Agriculture Secretary Francisco Tiu Laurel confirmed the number had dropped to around ₱2,100. Production cost estimates sit at ₱2,500 or higher. Farmers are losing money on every bag.
But the sugar buying program and its proposed floor price do not exist in isolation. The Philippines extended its sugar import ban through December 2026. Global sugar prices, meanwhile, are at their lowest since 2020. The ICE No. 11 benchmark traded below 14 cents per pound in early March 2026, roughly 40 percent below its 2023 peak. Philippine domestic prices remain elevated compared to world prices, and the import ban is the primary reason. A floor price on top of that would lock the gap into policy.
The Missing Voices at the Table
The Bacolod meeting included federation leaders, millers, the SRA Board, and labor groups. It did not include food processors, bakeries, kakanin producers, beverage manufacturers, or the MSMEs that use sugar as a production input. These businesses already face higher sugar costs compared to regional competitors in Thailand, Vietnam, and Indonesia. A floor price paired with an import ban institutionalizes that disadvantage.
The 2026 national budget already includes conditional spending mechanisms that face transparency concerns. A revived sugar buying program with a larger allocation would add another layer of public funds flowing into commodity price intervention without clear accountability benchmarks.
The National Congress of Unions in the Sugar Industry of the Philippines (NACUSIP) has demanded removal of all SRA board members, accusing them of secrecy and disregard for small planters and agrarian reform beneficiaries. That tension sits underneath the “rare unity” narrative. The alignment at Bacolod was between organized producer groups and millers who benefit most from government procurement. Sugar workers and small planters have a different view of how well the SRA has served them.
Geopolitics Adds Input Cost Pressure
SRA Board farmers’ representative Dave Sanson flagged another concern at the meeting: the Middle East conflict. The group expects rising costs for fuel, fertilizer, and other farm inputs tied to geopolitical disruption. If input costs rise while the sugar buying program sets a floor that barely covers current production costs, the margin problem doesn’t go away. It just gets absorbed differently.
The sugar buying program has worked as a short term mechanism before. It pulled supply off the market, prices recovered temporarily, and the cycle repeated. What the industry is now asking for is something more permanent: a floor, a ban, and a funded procurement system running simultaneously. That is a structural commitment from the government, not a crisis response.
For any business that buys sugar in the Philippines, the trajectory is clear. The cost of the commodity will be shaped by government policy, not market forces. And the people setting that policy are the producers, not the buyers. Operators in food and beverage should plan accordingly, because the pricing environment is getting less flexible, not more.
More developments that reshape the operating environment in National Signal section of Hemos PH.
