Sugar body tells planters to switch to the US

BERT WILKINSON | 6/8/2017, 1:26 p.m.
An umbrella body linked to raw cane sugar producers in the Caribbean has told the regional sector to concentrate on ...
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An umbrella body linked to raw cane sugar producers in the Caribbean has told the regional sector to concentrate on the more lucrative American market and ease exports to Europe, despite the fact that Europe has been a loyal customer for nearly 300 years.

The Sugar Association of the Caribbean issued its latest edict to exporters last weekend, more than a week after holding its 166th annual meeting in Barbados, where the future of the problem-plagued and money-losing sector was discussed at length.

The move comes as a fixed quota system for producers in Africa, the Caribbean and the Pacific regions dies at the end of September.

European beet sugar farmers, who have been increasing production in recent years, are expected to dominate the market, so the SAC is urging manufacturers to switch allegiance to the U.S., despite the fact that the Caribbean has been exporting to Europe for centuries.

“At peak up to the ’90s we were selling about 800,000 metric tons to the EU, but we will barely make 195,000 tons this year,” SAC Director Karl James of Jamaica said. “The decline has been dramatic. In about two years, the EU will be nothing more than a residual market for cane sugar for us, nothing else.”

He said the region can sell up to 60,000 tons to the U.S. market and approximately 300,000 to the Caribbean single trading bloc of countries at prices that are higher than Europe, so it makes sense to concentrate on these two and leave Europe behind.

Guyana, Jamaica, Belize and Barbados are the only remaining producers in the bloc. Trinidad and St. Kitts quit about a decade ago. Guyana recently announced plans to close and sell off three of its six grinding factories, saying they are unprofitable and the future is bleak in the European market.

Total production among the four countries for 2017 is estimated at 406,000, the SAC said.

James said the umbrella body also wants governments to continue levying a 40 percent tax rate on brown sugar imports into the bloc to protect the regional market.

As a reminder of how markets are changing, the SAC was quick to point out that producers need to add value to their industries by switching to refined white sugar for the confectionary and other markets.

But the bugbear remains high production costs, as is the case particularly in Guyana and Barbados, where the cost per pound is more than 40 American cents, or about half the price the best markets pay for raw cane sugar.

Touching on attacks against brown sugar, the SAC says the time has come to counter attacks against the sector.

“Members discussed the attacks by uninformed groups and persons that sugar is toxic, and therefore, unhealthy,” the SAC said. “SAC members noted that there is no science-based evidence to these attacks and that studies carried out in other countries pointed to the fact that unhealthy lifestyles, and not sugar, is main cause of obesity.”