Thu | Sep 21, 2017

Sugar powwow takes centre stage today

Published:Thursday | March 23, 2017 | 3:00 AMChristopher Serju
A truck laden with sugar cane confidently makes its way across the Flat Bridge.

Chairman of the Sugar Association of the Caribbean (SAC), Karl James, has promised a healthy discussion when stakeholders in the regional sugar industry and their European counterparts meet at JAMPRO's New Kingston head office today, to begin two days of intense deliberations over whether it makes economic sense for Jamaica and the region to continue to invest in the commercial cultivation of sugar cane.

"There is room for disagreement and discussion on the sugar industry because the question really is, 'Can you do without it? And if you can't do without it, how do we make sure it is viable, it is sustainable and really does the best for the country'," he told The Gleaner Tuesday.

Recommendations from today's workshop will inform the agenda for tomorrow's ministerial meeting of CARICOM sugar stakeholders, at the same location, when they will be further refined.

James went on explain how the two-day event was precipitated by a major geopolitical issue far removed from Jamaica.

"You need this meeting because there are uncertainties in the development of the sugar markets, particularly in Europe, which is where we have access for most of our sugar. So what is happening is that the guys are calling this for people to put forward possible approaches that they figure may be taken in light of the UK's decision with Brexit."

 

SEA OF UNCERTAINTY

 

If and when Britain makes true on its threat to leave the European Union (EU), Jamaica and other African, Caribbean and Pacific (ACP) countries are likely to find themselves floundering in a sea of uncertainty and financial instability, which could derail a number of economies. This is because for decades, they supplied cane sugar to Britain at reasonable prices under the Commonwealth Sugar Agreement, with the Motherland taking along the ACP suppliers of raw sugar, holding on to her skirt tail, when she joined the EU.

Ironically, even though owning and operating the world's largest cane refinery with a capacity processing of one million tonnes a year, Britain did not invest in planting a blade of cane in the United Kingdom. So the cane sugar had to be sourced from former territories. All the sugar exported to Europe was processed by this refinery in which the private sector company Tate & Lyle had an operating interest. It would direct ACP countries where to ship and the volumes of sugar to different countries.

... Good times coming to an end?

When Portugal joined the sugar regime in 1995, supplier countries were allotted additional export volumes to supply this market under a special preferential sugar arrangement and things took a turn for the better, but now the good times could be coming to an end.

"The ACP sugar producers all expanded their sugar production on the basis that they had a market in the UK and part of Europe. So with Britain deciding to move out of Europe, our current arrangement is no longer with Britain, it is with Europe. The protocol developed was with each one of us (ACP) and the EU, not Britain, although the commercial arrangement of a refinery was with Tate & Lyle, which is a British-owned company," James disclosed. He put in context the current dilemma of supplier countries.

"You need to know where the European is going, what kind of arrangement that will be in place for us to access that market. We now have to bring to the attention of everybody, including the British, that when they are negotiating Brexit they have to give consideration to what happens to those relationships that they had with their Commonwealth associates. What happens come the end of September, when there is the removal of quotas from the beet producers in Europe, so they can produce all the beet sugar they want. That will see a reduction in the demand for cane sugar to make up what they need, and that is likely to drive the price (of sugar) down."