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Talks underway to resolve refined sugar impasse

Published:Friday | December 5, 2014 | 12:00 AMTameka Gordon

Talks under way to resolve refined-sugar impasse

Discussions are currently underway between the ministries of industry and agriculture over plans to centralise the importation of refined sugar in state-run agency, the Sugar Industry Authority (SIA).

Manufacturers have vowed to resist the plan to reinstate the SIA as sole importer of the commodity, a proposal of Agriculture Minister Derrick Kellier.

The Financial Gleaner has learnt that "several meetings" have been held between the stakeholders, however both the Trade Board which issues import licences for the product, based on assigned quotas, and the Ministry of Industry Investment and Commerce (MIIC) have remained tightlipped on the proceedings or decisions taken so far.

"We are having consultations between our ministry and the Ministry of Agriculture; we are not at a stage where we can say anything," said communications adviser at the MIIC, Shaniek Parks on Thursday.

Industry minister Anthony Hylton said in a press release that "the issues surrounding the proposed refined sugar regime are far more complex than revealed in the public discussions so far."

MIIC is attempting to mediate a compromise "that will allow for the various sub-sectors within the industry to operate with certainty, and for a review to take place in a manner that will take fully into account the needs of the various elements of the sector," said the release.

Jamaica does not produce refined sugar. Under current policy, manufacturers who use the product as input are allowed to import it duty-free. But under the new proposal, SIA will source the product and distribute it locally.

The Ministry of Agriculture has charged that manufacturers have been reselling the product to retailers at a profit to them but at a loss for Customs.

Some 70,000 tonnes of refined sugar is imported annually, the majority of it by manufacturers.

Manufacturers have clearance to import the sweetener duty-free but only if it is being used as raw material input. As an end product, refined sugar attracts 128 per cent duty.

During a November 21 meeting at industry ministry, members of the Jamaica Manufacturers Association (JMA), Private Sector Organisation of Jamaica (PSOJ), and the Jamaica Chamber of Commerce (JCC) restated their objections on the proposal "and called for greater dialogue among stakeholders to find solutions to issues affecting the sugar industry and the proposed importation regime for refined sugar," MIIC noted in its press advisory.

The JMA has said its members would rather shutter their operations than buy the commodity through the SIA.

JMA deputy president of the JMA, Metry Seaga, said trade group has been so advised by "many large companies."

Users of refined sugar have further been advised to continue making their applications with the Trade Board as required under the existing regime until a further decision has been taken.

tameka.gordon@gleanerjm.com