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First though, the Chief Finance Officer of BSI/ASR explained to our colleagues that even though the European Prices started to decrease from last year, local industry in Belize didn't feel pinch because a contract with Tate & Lyle Sugars in London. He said that this contract ended this year and the re-negotiated deal now reflects what the prices are now, in real time, instead of the UK company absorbing the difference. Here's how Carballo explained it:

Belizario Carballo - CFO, ASR/BSI
"We will be seeing this year a reduction in prices that we get from the EU market which remains our most beneficial market. The level of preference is significantly reduced, but at this point in time it is still better that say the world market, which is our other alternative for selling sugar - exporting sugar. Belize as a country unfortunately has a very small local market. Roughly about 10% of pour production is sold on the local market. Which means that 90% of our products is exported and therefore we are heavily exposed to prices that prevail in those export markets. Of those exports markets, the EU market is most beneficial and is one to which we sell close to 80% of our production. The other 10% of exports would go to the USA market. But the USA market is limited to a quota of 11,000 tons. So we can't sell more than 11,000 tons in any pone crop to the United States market. The EU market is still our best market. The prices we are estimating we will received from that market is still higher than the world market price at this time. Clearly we will sell to the better price markets and that is why we are still estimating that we will sell to the EU market for next crop. Now the prices that we will see for the 2016 crop are much lower than those which we sell for the 2015 crop. Although from 2015 we had seen a drop in EU market price. But Belize was protected from the impact of that decline in the EU market price because we had a contract with Tate and Lyle Sugars which established a minimum price of 425 euros. So although the market price was trading close to 100 euros below that minimum, we still got paid that minimum price and so we were protected from that impact. That contract came to an end this year and the new contract that we have in place from 2016 crop onwards is based on the average price that Tate and Lyle Sugars purchases sugar from ACP countries like Belize."

So, how will this affect the millers? Well, Carballo said that the Belize Sugar Industries Limited will have to take the same hit that the farmers are preparing for:

Belizario Carballo - CFO, ASR/BSI
"Clearly, this situation with the lower prices is disappointing for everyone. Not only for farmers, but for millers as well and the general economy. It is one that will be very difficult to manage. I think this year we will all be in a very difficult situation both farmers at the lower prices and ourselves, because the farmer price is indicative of 65% of the revenue pool and if the 65% is low, clearly our 35% will also be lower and so we all have to find ways in which we can survive and pull through. That is why we have been speaking for some time now about the need for a strategic development plan, because that plan will allow us to collectively come together and determine what all of us will do. Because it is not sufficient for the farmers to do something independent of the others."

The tentative date of the start of this year's crop is Monday, November 30.