With the region no longer enjoying fixed quotas and guaranteed access to the European raw sugar market, the region’s four remaining sugar producers have asked governments to clamp down on refined, or white, sugar imports, saying they can meet the required average demand for 100,000 metric tons.
This week, Guyana, Jamaica, Belize and Barbados petitioned the council of trade ministers to order governments to increase import taxes on white sugar imports in a bid to restrict merchants in the region from buying white sugar from Colombia, the U.S. and other markets.
In the past year, the four countries have been moving to switch from raw brown sugar manufacturing to white, or refined, sugar after their decades-old sugar protocol with the EU collapsed when the EU ended the fixed quota system, guaranteed prices and a market of indefinite duration in October of last year.
The move meant that the four countries had to look inward and now supply approximately 300,000 metric tons to neighboring Caribbean markets as Europe fell away.
Sugar Association of the Caribbean President Karl James said this week, “We are confident that we can meet the demand for refined sugar in the Caribbean, but we want governments to restrict the white sugar imports. We spend $300 million to import white sugar. This is a lot of foreign exchange leaving the region, but we are talking with the importers and users of this type of sugar as the EU market has largely been abandoned. We want everybody to be happy and on board with this.”
James said the SAC has already formally submitted a position paper on the issue to government and expects a decision soon.
The sector in all four countries has been struggling to remain afloat, with most factories producing at prices up to four times higher than the world market. Governments in some countries have been subsidizing the industries to keep them in service because they employ thousands of workers directly.
James said there is a tariff system of up to 40 percent in taxes that are slapped on agriculture and related products entering the 15-nation Caribbean Community, but “there are loopholes in the system and it is not properly implemented.”
He added, “We want these holes to be corrected and the system fixed as we are very confident that we can produce enough white sugar to meet the demands of the regional market.”
Caribbean producers have been walking away from sugar production for the past decade and a half as production costs soared, as the EU warned of the consequences of opening its market to all and as labor unions maintained pressure on governments to keep industries open.
St. Kitts and Trinidad were the last to walk away. Guyana in the past year closed three of its six remaining estates, sending home approximately 4,000 workers, and Barbados is down to a single factory. Meanwhile, authorities in Jamaica had tried to privatize the sector, bringing in Chinese and other partners. That effort failed, but Agriculture Minister Audley Shaw says the sector badly needs recalibration to remain alive.
“These are tough times,” he told a stakeholders meeting. “Our commitment, therefore, is to review and recalibrate the sugar industry, to identify the gaps and address those gaps so that we can operate this industry efficiently and profitably. We have a duty and a responsibility to create the enabling parameters to aid the industry to emerge from its current doldrums.”