With four weeks left before the crop closes, Government says it is confident that the 216,000-tonne sugar target
originally set for this year will be reached. As a matter of fact, Minister of Agriculture, Dr. Leslie Ramsammy says the country is likely to meet the 200,000-tonne mark by next week.
Last year, the industry fell to a 23-year low of just 187,000 tonnes. But with a better than expected first crop, the Guyana Sugar Corporation (GuySuCo) had earlier this year confidently revised the target upwards to 219,000 tonnes.
“We have enough cane in the fields, and therefore once we have the right weather, I have no doubt that we will be able to meet that target. I am hopeful that by the end of next week we will surpass the 200,000-tonne target mark,” Ramsammy said in a Government-released statement.
Speaking on the issue of sugar export, the Minister said the export markets are guaranteed and there is no difficulty in this area.
“In fact it would be nice for Guyana to go back to production of 250,000 to 300,000 tonnes because we have the market.”
According to Ramsammy, because of the short production in recent years, the Caribbean market was not supplied as it should. An agreement was reached where the regional tax was waived so that member countries of CARICOM could import from outside. However, earlier this year, Guyana indicated that it would meet the demands for the Caribbean suppliers.
“So we continue to supply markets in the Caribbean and Europe and we continue to have a demand for Guyana’s sugar and sugar products, so I’m not worried that in increasing our production that we may have market problems.”
Minister Ramsammy pointed out that this does not accentuate the problems the industry has had with the European market. Those problems, he noted, have nothing to do with standards or volume since Guyana has exported sugar for hundreds of years and meeting volumes and standards is not new.
“As we increase, the market will remain a significant part; our major difficulty in that market is the price. The price was reduced in 2010 by 43 percent, resulting in Guyana losing some US$37 million annually and in part that contributed to the cash flow problem that GuySuCo had experienced.”
He explained that at present, sugar and sugar products prices are at a very low level. When the production level is not so high, there is the price difference that also compounds the problem.
“We have had interest from non–traditional destinations…people want Guyana’s sugar and once the price is right we are going to explore the stability of those markets.”
The official noted that Guyana will not exchange its old markets for new ones, but instead the industry will seek to sustain the traditional markets while exploring its other options.
In July, GuySuCo told a Parliamentary committee that the industry was now looking at 219,000 tonnes, about 3,000 more than was announced earlier this year.
It would be the first time in the last few years that GuySuCo, struggling with labour shortages, weather and technical problems, would even be contemplating announcing any targets above projections set at the beginning of the year.
However, Parliamentarians are remaining cautious, yesterday demanding that GuySuCo table at the soonest a multi-year plan that will spell out the strategy of the sugar industry for at least the next five years. The reasons were simple. GuySuCo has been recording a string of poor performances, grounding to a 23-year low last year with 187,000 tonnes. This was down from the 260,000 tonnes announced at the beginning of 2013. This year, the industry was a little more hesitant, setting a target of 216,000 tonnes.
The industry remains a critical one for Guyana, last year earning US$116M for the country.
Its contribution to the Gross Domestic Product (GDP) remained a steady 5-8% in the last few years, despite the severe challenges.
GuySuCo has remained a largely touchy issue for both the ruling party and the Opposition because of the sheer number of workers. The sugar industry remains the largest employer for the country with 16,000 workers, 300 suppliers and about 100,000 persons indirectly dependent on its factories.
The Opposition-controlled house has been approving billions of dollars in cash to keep the industry afloat as workers moved away in droves to the gold bush and the better-paying construction sector. Its flagship US$200M factory at Skeldon has failed to live up to expectations despite signs of increased production. GuySuCo is hoping that it can return to profitability by next year.
Almost 14,000 hectares of lands have been converted to accommodate mechanical harvesters, representing 30% of the total area under cultivation. GuySuCo wants to now increase this by another 8,000 hectares by 2017. Government has been banking on the mechanical harvesters to help the fallout from the poor labour turnout which has been consistently below 50% on almost all the estates in the last five years.
One of the major strategies by GuySuCo is the leasing of lands to private cane farmers – with 1,000 hectares allotted at Uitvlugt, West Coast Demerara and another 500 hectares, earmarked for allocation. GuySuCo said that $6B would be needed in the next three years to buy mechanized harvesters.
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