Nov 04, 2016 News
The Guyana Sugar Corporation (GuySuCo) had set out to produce its revised target of 218,188 tonnes of sugar for 2016. However, with less than two months remaining in the year, the sugar company is behind its target by 156,304
Based on the statistics recorded in the September monthly economic bulletin published by the Ministry of Finance, as of August the total amount of sugar produced stood at 61,884 tonnes for the year. This is significantly lower than the amount produced last year for the same period —-96,491 tonnes.
It was reported that in addition to the first crop being lower than expected, planting for the second crop started late which resulted in a significant decline by 65.9 per cent when comparing production for August, 2016 to that for 2015.
Due to the critical factor of late planting, the Finance Ministry said that GuySuCo may have to revise its 2016 target downwards. In July no sugar was produced. The months of June and July always record zero production for sugar as harvest of the first crop is completed in May.
At the end of the first crop, the total amount produced was 56,645 tonnes. This was a reduction of 23,624 tonnes from the budgeted 80,269 tonnes and also down from 2015’s half year production of 81,143 tonnes.
The Ministry of Finance had said that this year’s shortfall was reflected in a decline in export sales, from a budgeted amount of 58,272 tonnes to an actual 49,278 tonnes, compared with 77,000 tonnes realized in the same period last year.
In the August report by the Ministry, the industry was still expected to achieve its revised target despite a fall in production for the first crop. GuySuCo had initially projected to produce 240,000 tonnes of sugar this year but had adjusted its figure due to several issues; one being harsh weather conditions causing most estates to have missed their targets.
It was noted that the El Nino weather phenomenon resulted in stunted cane growth and a decline in cane yields from 57.45 tonnes cane per hectare (tc/ha) in the first crop of 2015 to 45.2 (tc/ha) in 2016. Additionally, factors such as delays in tillage, planting and crop husbandry operations contributed to the underperformance of the industry.
And if this production woe isn’t enough, GuySuCo had said that it will be unable to pay salary and wage increases to its workers this year. This came out of the latest negotiation talks between the corporation and representatives from the Guyana Agricultural and General Workers’ Union (GAWU).
The Union was told at the negotiation meetings that GuySuCo had recorded a loss of over $16B in 2015. The sugar corporation had also presented its projected losses for 2016 and 2017 which would be approximately $13B and more than $12B respectively.
The Government of Guyana continues to provide subsidies to the entity so as to cushion the effects of the monumental losses. In 2015 the corporation received $12B in subsidy and this year was paid some $9B.
GuySuCo has since requested a top up of $3.5B to sustain operation. Due to strike action on October 17, 2016 six factories were not in operation. This created a deficit of 202 tonnes. The corporation is calling on GAWU to advise its members to put the interest of the industry first so that the full benefits of the second crop can be realised.
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