Sat | Dec 10, 2016

Local sugar manufacturers to sweeten domestic market

Published:Wednesday | January 14, 2015 | 12:00 AM

With the scheduled abolition of the European Union (EU) quota system in 2017 fast approaching and a three-year supply deal with British refiner Tate and Lyle in its final year, Karl James, general manager of Jamaica Cane Product Sales (JCPS), the marketing arm of the Sugar Industry Authority (SIA), says the domestic market will now be the priority for local sugar manufacturers.

"This is the last year of the very high price that we negotiated with Europe. We are hoping to negotiate a good price for 2017, but in the meantime, we have taken a decision that the priority will be the domestic market," said James in a telephone interview recently. James is also chairman of the Sugar Association of the Caribbean (SAC).

"We are also looking seriously at the Caribbean market, and, in my other capacity as head of the SAC, we have taken the decision that this is going to be an area of stronger focus from 2015 onwards," he added. "So that with the price expected to go down in Europe, we are now focused on the regional markets to be able to supply, as much as possible, at prices relative to what we now enjoy."

Reforms to the EU's common agricultural policy in March 2013 will result in the abolition of sugar quotas come 2017, which will bring an end to the preferential treatment that African, Caribbean and Pacific (ACP) sugar producers have been enjoying since 1975. The end date was initially set for 2015, but an extension of two years was granted in a split decision among member states after some countries sought additional time for the sector to adjust.

Under the new regime, it will mean greater competition for Jamaica from lower-cost producers, but in his departure interview with The Gleaner, Dr Wu Huaixiang, former chief executive officer of Pan Caribbean Sugar Company, expressed concern that local production, overall, might struggle to compete under the new arrangement.

"Jamaica's sugar industry can reach great heights, but the challenges remain," said Wu. "... The biggest challenge for me is the post-2017 period when we will have to compete with other ACP countries for sugar markets."

"As a country, Jamaica is not doing enough to address this challenge. I also think the regional sugar market can be invigorated and developed, but Jamaica, or some other country, has to take the lead."

Currently, there are four active sugar-producing nations in the region - Jamaica, Belize, Guyana, and Barbados. The deal with Tate and Lyle sees Jamaica getting close to US$894 per tonne for 50 to 60 tonnes of sugar each crop year.