Email

Print

As we reported last week, the cane harvesting season closed two weeks ago - and now ASR/BSI along with the cane farmers associations are preparing for the next harvest.  The 2016-2017 harvest saw record production of sugar, and a high sugar yield from available cane. ASR’s Mac McLachlan discussed the encouraging developments:

Mac McLachlan - VP, Intl' Relations, ASR Group
"We brought in almost the same amount of cane, 1.29 million ton this year, it was 1.31 last year but we did manage to make over 10,000 tons more sugar from that cane which of course is a benefit to the mill but also to the farmers through the revenue sharing agreement. We're not complacent about this we're looking at what we can do next crop or in the off crop now to ensure an improvement in mill and factory performance. We have some investment plans that will help to achieve that and so all in all we have to celebrate the fact this industry use to produce 90,000 tons of sugar, now produced near 150 in the same mill.â€￾

But, next season is riddled with question marks - mostly because the world price for sugar is doing down sharply and the European market which Belize sells into is changing with the production of beet sugar.  

McLachlan discussed the challenges:

Mac McLachlan - VP, Intl' Relations, ASR Group
"The price of raw sugar, the global price of raw sugar at the end of last year was some where around 24 US dollars a pound, today it's around 13. That's an indication of what's happened in the market place combined with the EU means that the next few years I believe we will be looking at a significantly lower price for sugar and that obviously has a direct correlation with the price that will be attractive for cane. My message at the end of this crop is that we have to look at what is in our control, what's in our own hands in order to move forward and make this business more sustainable against whatever challenges come up in the future."

Reporter
"Would you say that is where we basically have an advantage when it comes to sugar produced by cane we can actually produce different type of sugar and you cannot say the same about the beat."

Mac McLachlan
"Yeah beat sugar is a different process and we have an advantage and we have specific advantage in Belize within the Caribbean that we produce some of the best direct consumption sugar, those are food grade sugars that can be sold directly into the marketplace, they don't need to go through a refinery. Now we have been looking at how we can try to mitigate the impact of falling prices and lower prices moving forward and one of the ideas that we've come up with is that we would produce higher volumes of these direct consumption sugars. At the moment BSI produces around 30,000 tons of DCs we would like to push that up to 50,000 tons and have looked at how much that would cost, what the investment would be. The investment is 22 million Belize dollars, we have our board approval to go ahead with that investment provided that we can guarantee that they won't be any interruptions to the cane supply.â€￾

Of course, it’s not quite that simple and while ASR wants a long term agreement, the Belize Sugar Cane Farmers Associations has its own reservations - and finding common ground poses significant challenges.