Oct 16, 2010 News
The sugar industry which has long been a bedrock of Guyana’s economy has performed dismally this year with export earnings dropping by 21 per cent as compared to the previous period.
This is according to the 2010 financial mid-year report tabled in the national Assembly on Thursday last by Minister of Finance Dr Ashni Singh.
According to the report export earnings of sugar declined by 21 percent to US$37.8M compared to US$47.8M earned at end June 2009.
This outturn was attributed to a 22.2 percent decline in the average export price to US$494.2 per tonne reflecting the final step of EU price cuts which took effect last October, outweighing the 1.5 percent increase in export volume to 76,506 tonnes.
The report stated, too, that the outturn of the sugar industry for the first crop declined by 1.8 percent to 81,864 tonnes.
It was stated that the prolonged dry-season with El Nino conditions played a primary role in the production outturn as a result of the reduced sucrose content and the lack of water in the canals hampered the transportation of canes from field to factory.
“Taking these and other factors into consideration, the whole year target has been revised downwards from 280,000 tonnes to 260,000, and projected growth has been revised from 19.8 percent set at Budget to a more modest 11.2 percent.”
It was stated that works continue on the turnaround plan which is aimed at seeing the realisation of increased acreage under cultivation and improvements in the cane to sugar ratio, all aided by more stable industrial relation.
It was reported that given the strong performance of the rice industry in 2009, especially the second crop performance which resulted in an overall output last year of 359,789 tonnes, a more moderate target of 343,373 tonnes was set for this year.
At the time of Budget it was anticipated that prevailing El Nino conditions at the end of 2009 would continue well into 2010, adversely affecting sowing of paddy with resultant lower acreage planted and lower production.
Early Government intervention mainly through assistance given to farmers resulted in higher acreages sown than initially projected, increased yields of paddy as a result of the sharing of improved farming practices with farmers which included better management of water resources and farm practices, resulted in a 2010 first crop performance of 168,267 tonnes which was 4.6 percent better than first crop 2009.
While this trend of improved yields is expected to continue into the second crop the onset of unseasonal rains has led to the target of 188,111 tonnes being maintained.
The revised rice industry’s annual target of 356,378 tonnes will now be some 13,005 tonnes better than the original budget target and results in an anticipated decline of the industry’s output by just 0.9 percent compared to 4.6 percent at the time of Budget.
As it relates to other sources of earnings, the Value Added Tax continued to skyrocket and continues to rake in beyond the projections. For the first half of this year Value added and excise tax collections in the first half of the year amounted to $23.2 billion, This is an increase of 9.1 percent over the corresponding period in the previous year.
It was stated that Value added tax collections improved on account of increased demand for commodities by the construction, trading and manufacturing sectors.
It was reported, however, that excise tax collections fell short of the 2009 collections, on account of lower receipts from petroleum products due to comparably lower excise taxes rates for both gasoline and diesel as against first half of 2009, combined with the reduced collections from motor vehicles linked to lower levels of vehicle imports.
When this newspaper sought to clarify whether there was a lower level of vehicle imports given the rate with which the PMM series ended, Commissioner General of the Guyana Revenue Authority, Khurshid Sattaur, refused to have any discussions with this newspaper.
Customs and Trade taxes totalled $3.9B according to the report which reflects an increase of 13.1 percent over 2009, with import duty collections accounting for 88.8 percent of this amount, an increase of $377.8M over 2009.
“This is mainly due to increased collections from capital goods consistent with the higher levels of agriculture, transport and building machinery imports…Collections for consumption goods increased as a result of an expansion in the demand for some basic commodities for household consumption combined with increases in intermediate goods associated with a higher level of imports of food for intermediate use as well as other intermediate goods.”
Collections from the non-tax revenue category during the first half of 2010 declined by $246.9M relative to 2009 primarily as a result of a decrease in Bank of Guyana profits of $791.4M.
This was partially compensated by increases in several other non-tax categories including dividends from equity holdings and miscellaneous categories of non-tax revenue.
As a result of these developments 2010 projected revenue for the year has been revised to $107.9 billion.
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