7 News Belize

Will Can Sugar Be Crushed By Beet Sugar?
posted (December 6, 2016)
Last night, we brought you extensive coverage of the opening of the 2016-2017 sugar season, which is off to a great start. They are trying to mill 1.4 million tonnes of cane by the end of the season. But, it will be the last crop before the European Market is set to change.

At the end of September of next year, the European Union will lift all restrictions they had on European Beet Sugar, which will allow beet farmers to compete directly with sugar milled from sugar cane. Now, the European farmers are producing at a very high rate of efficiency, which far outperforms Belizean cane farmers.

Come October 2017, they will be able to flood the market with as much sugar as they can produce, which will drive the price of sugar down. So, is Belize's Sugar Industry ready for the shock that could inflict?

Well, you saw how the farmers reacted when the world price of sugar dropped last year, and so, we asked the new Minister about his predictions for that huge, impending transition. Here's what he told us:

Hon. Godwin Hulse, Minister of Agriculture
"It is even more critical now that the farmers utilize the facility of CIRDI and all the other research that is coming forward to try to get their reels up because if you were getting 15tons and an acre and you can push that to 45 tons and an acre with just a little more inputs, you are ahead of the game even when the prices go down, that is the issue. We're a big girl or boy, just to be gender neutral, we're 35 years old and the ACP countries are old countries now, the Caribbean, pacific and African countries are old countries now. The European Union is saying 'look it's no longer hands out, it's no longer hand up, its partnership and competition' and I think we should be able to sustain ourselves. I'm very happy and I've said this over and over that I'm glad we have ASR as the group and we are part of that group to be exact because they have mills in England, Portugal and Italy. That's a good thing for us because they have legs both in the European Union and in the UK when the UK breaks away. So I look forward to it being good, I don't see those things as threats, I see them as opportunities. What it means is that cane sugar has to produce in a way that it can compete and remember also that you're dealing with Mrs. housewife generally around the world and she's basically the same. Its preference you know, I'll give you a good example, every now and then when family of mine do go across to Cshetumal I hardly ever make those trips I'm a Belize person fully, and they come back and say 'you know the Coca-Cola in Mexico doesn't taste like the Coca-Cola in Belize'. I have no idea of that because I'm not a coca cola person but here we are one company one name and so, but people have a different taste. These are the things that affect markets so I think we will do well."

We also asked the ASR's Mac McLachlan for his perspective on what the change could mean for Belize's sugar which is exported into the European market. Here's what he had to say:

Mac McLachlan, Representative, ASR/BSI
"There is a good future where we are looking at all sorts of opportunities in the European market producing more direct consumption sugars where you get a higher profit which of course then is good for the whole industry, so we're looking at that. The other thing we're looking at with the support of the Belize government and other sugar producing governments in the Caribbean, is the Caribbean market, because as things stand in the Caribbean, there is no tariff that prevents the importation of refined sugar into the Caribbean. Recently at a recent CARICOM trade meeting it was agreed that the standards that define refined sugar, we in the Caribbean can meet those standards. That means that there's no real reason why there shouldn't be a tariff put in place which could open a brand new market for Belizean sugar into the Caribbean. So we're working actively in all different ways but number one take away from your question is the need for us to improve our competitiveness. If we can improve the competitiveness of the way we produce sugar here and reduce the production cost of that sugar, we will be competitive in any market. That is a combined effort that needs to come from improving productivity and yield in the fields, maintaining the factory efficiency that we have and ensuring that everything is done as efficiently as it possibly can be to reduce the cost."

Daniel Ortiz, 7News
"Sir early this 2016, the prices went down and the cane farmers felt that in the first 2 payments, should one expect that there should be some sort of preparation for possible profit reductions?"

Mac McLachlan, Representative, ASR/BSI
"Well yes, unfortunately that's the traditional market for the sugar in Belize in Europe because it has duty free access to that market, quota free access to that market. There are quotas on the amount to sugar we can sell into the U.S market, and other markets. So as those prices in Europe fall to the global market price, we would expect them to be a bit lower. This year I think the first cane estimate that came out this year was the third highest in the last 16 years. We've got a little while to prepare for that but it's important that we do."

One cane farming expert has contacted us pointing out that Guatemala is already producing 40 or more tonnes of cane per acre which is more than twice Belize's 19 tonnes per acre.

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