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Sugar woes threaten to sink regional industry

Published:Thursday | April 7, 2016 | 4:00 AMChristopher Serju

AS THE local sugar industry teeters on the brink of collapse, a former chairman of the International Sugar Organization is warning that the regional sugar market could also be at risk of crumbling.

In addition, industry players argue that the projected price of J$51,000 per tonne for sugar on the international market, a significant fall-off from the J$70,000 per tonne last year, is a price point that would make the continued cultivation of sugar cane locally unfeasible.

"If I paid my reaping and transportation costs to the factory and only grew rations, replanted no new cane, what I am getting for the cane could just barely cover it this year at J$51,000 a tonne," cane farmer Kenneth Newman told a Gleaner Editors' Forum held at the company's office last Wednesday.

"So it is now a viable industry at this level. We have to stop fooling ourselves and accept that we can no longer be producing sugar to sell at world market price or anything near to world market prices."

Said Newman, whose family has been in the cane farming industry for 50 years: "Our situation now is dire. The announced price we are told we are getting cannot meet our obligations."

Cane farmers get 62 per cent of the price paid for sugar on the international market, with the rest going to the factory that processes their cane. This compares with the 73:27 split in favour of cane farmers in Mauritius. However, local cane farmers are constrained from pressing for a higher share of the split due to circumstances well beyond their control.

"How can we be pressing for more when the factories that are producing are operating at way below capacity and most of them are inefficient, going way below the required standards? So we can't put any pressure on them to pay us more than the 62 per cent," the cane farmer who supplies the Worthy Park sugar estate in St Catherine explained.

christopher.serju@gleanerjm.com