Quimbo cracks code on how the onion cartel works

At a glance

  • Here's how the whole onion hoarding-price manipulation scheme works, according to Marikina City 2nd district Rep. Stella Quimbo (In photo).

  • (Photos by Ellson Quismorio/ MANILA BULLETIN)

Economist-solon Marikina City 2nd district Rep. Stella Quimbo appears to have cracked the hoarding-price manipulation code that the likes of "Sibuyas Queen" Lilia Cruz (alias Leah Cruz) are allegedly employing.

Quimbo managed to do so after only four public hearings of the House Committee on Agriculture and Food, which Speaker Martin Romualdez himself ordered the panel to do after prices of onion mysteriously skyrocketed during the last quarter of 2022.

And based on what Quimbo learned from the panel inquiry, this supposed onion (sibuyas) cartel is industry-wide and designed to leave local farmers out in the cold.

"Medyo kakaiba ang cartel na nakikita natin dito, unlike in other industries na usually ang cartel, which means nagsasabwatan ang mga competitor...dito tila ang cartel ay nangyayari within a group of companies (This cartel is different, unlike in other industries that have a cartel, which means collusion between competitors...here, it seems that the cartel takes place within a group of companies)," she said.

Quimbo said the alleged participants in this set-up are trader-slash-importer Vieva (Vegetable Exporters and Vendors Association) Philippines, Inc., where Cruz's family is the majority owner; Golden Shine, a logistics company; and cold storage facilities like Tian Long Corporation, the largest facility of its kind in Bulacan.

"As we know, it begins with importation," noted the lady solon.

"Very important makapag-import before harvest because by the time dumating ang napakaraming imports, ay pwede nang gamitin yun para makapag-bargain or leverage against the farmers at the farm gate. So nabibili at excessively low prices (It's very important for them to have importations before harvest because by the time the imports arrive, they can use that as a bargaining tool or leverage against farmers at the farm gate. So they are bought at excessively low prices)," Quimbo said.

It was established in earlier hearings of the House panel that Cruz purchases onions in bulk from the local farmers.

"At that point, mayroon na silang imported onions, mayroon na rin silang local. At ito naman ay masto-store sa iilan lamang na cold storage within your control, and after that alam na natin ang mangyayari (At that point they both have imported onions and Local onions. And these will be stored within the few cold storage [facilities] within your control, and after that we already know what will happen)," said Quimbo, the senior vice chairperson of the House Committee on Appropriations.

"Kaya nang magkaroon ng synchronized withholding ng stocks and at the same time manipulation of the price (They can now have a synchronized withholding of stocks and at the same time manipulation of the price)," she underscored.

Quimbo further noted that because the cartel is "fully, vertically integrated" with the involvement of such players, it can easily control the supply of a commodity in the market.

"And therefore, once you are able to control the supply, from start to end, ay kaya mo naring ma-manipulate ang price (You may now also manipulate the price)," she said.

As for the questionable timing of onion importations, solons conducting the House inquiry earlier called for a executive session with Cruz and other resource persons to find out whether or not the alleged cartel has contacts within the Department of Agriculture (DA).

The theory is that the DA gets duped into thinking there's a shortage of onions and thus allows for an important. Only, it's the cartel that created this artificial shortage.

Imported agricultural products like onions always hurt local farmers since the lower production costs abroad make these products cheaper than locally-produced onions. And cheaper means it's preferred by consumers.

The agriculture and food panel's next couple of hearings on the onion hoarding-price manipulation issue will take place on March 21 and 22.