Unexplained surge, vanishing contraband among mysteries at House onion probe
MANILA, Philippines — Agriculture officials are still trying to find out how supposed cartels are driving up onion prices and how contraband produce has been disappearing from warehouses, members of the House of Representatives were told on Wednesday.
Lawmakers grilled officials of the Department of Agriculture for hours on how a modest shortage led to a price surge in December.
Upon being asked by Rep. Stella Quimbo (Marikina) whether they agreed that there is a "mystery" behind the spike in onion prices, Agriculture Director Gerald Glenn Panganiban said: "Yes. We’ve been inspecting warehouses. When we monitor, the onions are there, and then it disappears."
Panganiban, however, sidestepped Quimbo’s question on whether the DA believes there are cartels controlling the price of onions.
"I can’t say if there are cartels, but aside from production and importation, it seems there are forces controlling (the supply). I don’t know if those are called cartels," he said.
Panganiban said that the department has received reports of "thousands of bags" of onions disappearing from warehouses ahead of raids by the authorities.
"We have reports where cold storage warehouses were emptied just before a raid, right after we took pictures of the bags of onions labelled 'Made in China,'" Panganiban said. "Those are probably thousands of bags that disappeared."
DA officials, however, shared the details of only one incident. An official from the office of Agriculture Assistant Secretary James Layug said that a warehouse owned by Morehouse Marketing was emptied of bags of onions last December 1 — the same day authorities from the National Capital Region Police Office were supposed to raid the facility.
At least P9 million worth of smuggled agricultural products were seized from a warehouse owned by the same company in 2021.
Shortage not enough to explain price surge
DA data show that the overall supply of onions in 2022 was short by only around 25,000 metric tons — just 7% of the total demand of around 364,000 metric tons.
"We know that prices are determined by supply and demand. How come onion prices skyrocketed despite only a modest shortage? It makes me think. There are mysteries, and one of them is cartels," Quimbo said, partly in Filipino.
Quimbo also criticized the DA’s late importation and poor forecasting after Panganiban admitted that department determined in August that there would be enough onions. The department did not issue import permits for onions from April to December 2022.
Onion prices started surging in September and reached an all-time high of P700 per kilogram in December.
Panganiban said that the department is expecting at least 5,000 metric tons of onions from the import permits issued in January, but the actual number could be lower than that due to long-standing issues with transportation.
Panganiban added that the department has also caught smugglers who "misdeclared" onions as bread, fishball and pastries.
"Of the smugglers we caught, most are not registered with the Bureau of Plant Industry. Only one was registered here," Panganiban said.
Customs intelligence officer Troy Tans said that the bureau has confiscated at least 600 million smuggled agricultural products in 2023 alone.
Shortage of cold storage facilities
Ramon Silverio, Kaakibat Provincial Cooperative Council chairperson, said that the country’s onion farmers can produce enough to meet the shortfall but the lack of government-owned cold storage facilities leaves farmers at the mercy of businessmen.
This has made farmers hesitant to plant the crop.
"The government needs to build more cold storage facilities so farmers can dictate the prices of their own crops," Silverio said in Filipino. "If the businessmen tell us to set (our farmgate price) at P8 to P15 (per kilogram), there’s nothing we can do, because there are not enough facilities where we can store our harvest."
Besides preventing post-harvest losses, Silverio said that the DA has to act on the shortage of storage facilities to prevent hoarding.
"If the government provides a cold storage facility for every cooperative, this would give them a list of who owns the facilities and allow them to monitor its contents. (This will also) help avoid added costs of production," Silverio added.
Panganiban said the DA has P240 million to build cold storage facilities in the Ilocos, Cagayan Valley, Central Luzon and the Mimaropa regions. The department plans to put up two facilities worth P20 million and five units worth P40 million to store at least 120,000 bags or 3,000 metric tons of onions.
This would double the number of cold storage facilities that the DA has established since 2018. Currently, the DA’s seven cold storage facilities can store about 2,250 to 2,430 metric tons of onion.
Panganiban said that the DA aims to put up these facilities near key production areas to shorten farmers’ travel time.
Philippines Seed Industry Association president Mary Ann Sayoc said that some of the government’s cold storage facilities are "not optimum," which leads to onions rotting before the end of their shelf life.
"Some of the onions in these storages rot. Normally onion varieties can be sold for 6 to 8 months. But towards the 7th or 8th month, the quality of the stored onions deteriorates due to poor conditions," Sayoc said.
Red onions are currently sold at the market for P240 to P350 per kilogram, while white onions can be bought for P170 to P350 a kilo, based on the DA's latest price monitoring report.
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