Competing on a Global Level with Sugar

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Updated: December 5, 2016

Going into the 2016-2017 Sugar Cane Crop Season, all three sugar cane producing associations along with the Belize Sugar Industries Limited and American Sugar Refineries, ASR, will need to compete on the global level. That’s because the European Union’s preferential market that Belize was a part of will no longer exist. Vice President of International Relations for ASR, Mac McLachlan and Agriculture Minister, Godwin Hulse, explained what this means for local cane farmers.

MAC McLACHLAN

“What we’re talking about really is a reduction in the price paid for sugar in Europe. From the first of October 2017 80% of the sugar produced in Europe is produced from beet sugar and that has always been constrained by quotas, those quotas will be lifted and beet sugar producers can produce as much sugar as they like in the European market. There will still be room of cane sugar to enter and be refined in our refineries both in Europe and in the UK but we can expect the prices to fall to basically the world level, we can never predict what those prices will be but it’s likely they will be lower than the prices enjoyed in recent years by ACP preferential suppliers but there is a good future, we are looking at all sorts of opportunities in the European Market producing what we call direct consumption sugars where you get a higher profit which is then good for the whole industry; so we’re looking at that. The other thing we’re looking at  is the support of the Belize government and other sugar producing governments in the Caribbean because as things stand in the Caribbean there is no tariff that prevents the importation of refined sugar into the Caribbean and 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 and that means that there is 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 the number one takeaway from your question is the need for us to improve our competitiveness.”

GODWIN HULSE

“It is even more critical now that the farmers utilize the facility of SIRDI and all the other research that is coming forward to try to get their reals up because if you were getting 15 tons an acre and you can push that to 45 tons on an acre with just a little more inputs you are a head of the game even when the prices go down that is the issue and we are big boys and girls and the ACP countries are old countries now, the Caribbean and Pacific and African countries are old countries now. The European Union is now saying it’s no longer a hand out but partnership and competition and I think we should be able to sustain ourselves. I am very happy and I’ve said this over and over that I am glad that we have ASR as the group, or we are part of that group because they have mills in England, Portugal that is 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.”

McLachlan said small and big farmers are expected to be affected by this and there is a high probability that estimate for sugar cane prices will be unsatisfactorily low.

MAC McLACHLAN

“As those prices in Europe fall to the global market price we would expect that it would be a bit lower but this year I think that the first cane estimate that came out was the third highest in the last 16 years so we’ve got a little while to prepare for that but it’s important that we do ; for the farmers it’s about reducing the amount of cost to producing their cane and improving the revenue they receive for it and that means producing higher quality, higher yield cane on less land because then you have less inputs  to put in, it costs you less but your revenue you get back is more, that is really important for the future of the farmers. For the mill its about us looking for the best type of sugars to produce with whatever the best profit is for those sugars and where we can sell them most effectively.”