Coca-Cola laments farmers’ failure to supply sugar

MANILA, Philippines — Beverage giant Coca-Cola FEMSA Philippines is now complaining over local farmers’ failure to supply the committed volume amid the expected lower output for the crop year, the Department of Agriculture (DA) said.

Agriculture Secretary Emmanuel Piñol said he recently received complaints from Coca-Cola that farmers are not complying with the agreement to sell sugar to the beverage company.

“When Coke was importing HFCS (high fructose corn syrup), sugar stakeholders complained and asked Coke to buy from them and Coke agreed and even abandoned HFCS altogether. They signed with local suppliers,” Piñol told reporters on the sidelines of the first Agriculture Trade and Investment Forum yesterday.

“But now, farmers do not want to supply what Coke needs. Local sugar producers are speculating the prices of sugar will shoot up that is why they do not want to release their committed volume to Coke,” he added.

Sugar prices in the mill gate have started to improve as it jumped 35 percent to P1,671 per 50-kg bag as of May 6 from P1,241 per 50-kg bag in 2017.

Coke also brought the matter to Socioeconomic Planning Secretary Ernesto Pernia who, in turn, called Piñol to clarify the issue.

“Pernia asked me if there is a shortage and I said there is none because there really is no shortage,” Piñol said.

The agriculture chief will meet with sugar stakeholders on Monday to discuss the matter.

“I have to call and ask them if they are reneging on their commitment to supply Coke. Because if Coke decided to import then farmers would start complaining once again,” Piñol said.

“This is like opportunism because when prices are low, they are blaming everyone but when prices are up, they still don’t want to sell,” he added.

So far, DA has not received any complaint from another beverage giant Pepsi-Cola Products Philippines Inc.

Last year, soft drinks company have agreed to recalibrate their sugar procurement and purchase more locally amid the tax reform program of the government and to help local farmers.

Earlier this month, the Sugar Regulatory Administration (SRA) said Philippine sugar production will meet domestic demand and US quota with the target of 2.27 million metric tons (MT) despite the lower output for the year.

A sugar crop year starts every September and ends in August.

Latest data showed that local raw-sugar production continued its decline as it reached 1.83 million MT as of May 6, 11 percent lower than the 2.16 million MT recorded in the same period in 2017.