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The marketing of sugar in the Philippines is already well established.
This starts with the delivery of harvested millable canes to
the mill where, under the present system, the sugarcane planter
agrees to allocate certain percent (in Bicol forty (40)%) of
the output of his sugar and molasses with the mill in payment
for the processing of the cane.
As soon as the sugar is processed,
a warehouse receipt called quedan is issued to planters by the
mill representing his 60% share of the sugar and molasses, which
after milling, is stored in the mill warehouse. This document
attesting to the physical presence of the sugar and molasses
in the warehouse is negotiable thus it allows the bearer to withdraw
the stocks anytime. Two types of quedan is being issued by the
mill as follows; A for sugar allocation for the US market in
compliance with the country's quota requirements; and B for sugar
for the local /domestic market. The proportion of sugar that
goes to the different types of quedan is being determined by
the Sugar Regulatory Administration (SRA). In Bicol, it is set
at 8% for export and 92% for domestic market.
The flow of sugar for the domestic
market follows an established pattern. After getting the quedans,
the planters usually sell these immediately to the traders who
in turn, sell them to bigger traders who accumulate the quedans
and subsequently sell the volume sugar either to the wholesalers,
the distributors or to the processors. The processors use the
sugar as input for processing while the wholesalers and distributors
sell their sugar to the retailers. The sugar eventually reaches
the consumers through supermarkets, wet markets & sari-sari
stores. (Figure 2)
For Bicol mill district, quedan
withdrawal and marketing of sugar and molasses depends on individual
loan status. Planters who have no standing loans from the PENSUMIL
can withdraw and market their own product share, while those
with outstanding loans received only the net surplus after loan
repayments. Generally farmers sold their share to cooperatives
where they are affiliated or to PENSUMIL itself. Sugar produced/stocks
at the mill is sold only to accredited traders. These accredited
traders are either viajeros engaged in buying and selling of
sugar and other prime agricultural commodities or cooperatives,
which at the same time sugarcane producers. The trader-viajeros
supply the sugar requirements of the province and of the entire
Bicol during milling and off-milling season. During milling
season, they bought the sugar produced by the local mill and
sold to traders and wholesalers in Metro Manila. According to
them, local traders and consumers prefer the raw sugar produced
in other sugar districts because of its lower price. Raw sugar
produced in PENSUMIL is of best quality thus commands higher
price and according to traders interviewed, this best fit the
quality requirement of consumers in Metro
Manila. Sugar requirement for Bicol is supplied by these trader-viajeros
from other sugar districts such as in Visayas, Negros and Cebu.
The identified market channels
for sugar in Bicol are the accredited trader/viajeros, wholesaler/retailers
and food processors/manufacturers (Figure 3).
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