The Department of Agriculture (DA) has threatened to padlock all stores selling overpriced sugar.

Agriculture Secretary Arthur C. Yap issued the threat Wednesday after the department set a suggested retail price (SRP) of P52 per kilo for the commodity.

The Department of Trade and Industry (DTI) is also closely monitoring the retail prices of sugar in Metro Manila and elsewhere.

Yap said owners of all stores selling sugar higher than the SRP would be charged criminally.

DA and DTI will check the sugar supply chain, from the sugar mills to retail outlets, so government can spot abnormal price adjustments.

“We will swoop down on establishments selling sugar for P55 to P60 a kilo and ask their owners or managers to explain their price levels,” said Yap. “If they cannot give a valid explanation for selling sugar beyond the newly set SRP of P52 a kilo, then we can close down their outlets and file charges against them for violating the Price Act.”

Initial reports reaching the DA and DTI showed that supermarkets have generally been selling refined sugar between P49 and P52.

DA and DTI monitoring teams will be deployed to wet markets as persistent reports say the commodity sells higher than P52 per kilo.

The DA and the Sugar Regulatory Administration (SRA), along with the National Food Authority (NFA), will dump 150,000 kilos of sugar to poor consumers via the NFA’s Tindahan Natin outlets in Metro Manila in order to cushion the impact of the higher prices.

Earlier this week, Yap and other officials reached agreement with local traders to fast track a plan to import some 60,000 metric tons (MT) to 150,000 MT of sugar into the country as a way to stabilize the supply and stem the price surge.

Yap also endorsed to Trade Secretary Peter Favila the recommendation of SRA administrator Rafael Coscolluela for an SRP of P52 a kilo for the last week of January.

“The DA recommends that the SRP for refined sugar be increased to P52 per kilo for the last week of January 2010,” said Yap in a January 25 letter to Favila. “In as much as mill gate prices change every week—and considering the three-week lag time for these prices to be reflected in the retail market—a weekly suggested reference price is recommended for refined sugar.”

This recommended SRP for the last week of January 2010 is reasonable because it is reflective of the wholesale/landed price of P2,400 per 50-kilo bag and is a result of the recent monitoring operations done by the SRA and DA,” he told Favila. “This is to prevent any tightening of supply in the market while also ensuring a fair retail price for the consuming public.”

Yap directed SRA to issue new regulations requiring traders to liquidate their sugar release orders to make sure, he said, that “sugar stocks withdrawn from the mills do get to the intended beneficiaries in the local market instead of being smuggled out in the face of spiraling prices abroad arising from tightening supplies.”

He explained that rocketing production expenses and bad weather have combined to cut yields over the past two years, leading to a global shortage of an estimated 9 MMT that has exerted upward pressure on prices in the international market.

India’s aggressive efforts to beef up its domestic inventories have driven international prices to go up further, he added.

Officials of the DA, SRA, NFA and the Philippine Sugar Millers Association (PSMA) agreed with accredited importers in a Tuesday meeting at the Planters Products Inc. in Makati office to allow tax-free imports at the soonest possible time.

Accredited traders were originally set to bring in their imports by May yet, but ensuing retail price spiral have prompted DA and DTI to let them ship such deliveries months ahead of schedule and via the NFA’s tax expenditure subsidy.

While the new price levels benefit domestic producers, some 87% of whom are small farmers who are agrarian-reform beneficiaries, Yap said the government is taking these measures to balance the interest of these producers with those of Filipino consumers.