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BSI Responds to Farmers on Low Sugar Prices

Last week we reported that sugar cane farmers were concerned over the first cane price estimate for the 2015/2016 crop. Cane farmers were asking BSI/ASR to review the prices with a view to see an increase. Today the company issued a release in which it stated that it had written to all three cane farmers associations explaining the rationale behind the first cane price estimate for the upcoming crop. Farmers were asking that the first cane price estimate of forty one dollars and fifty six cents per ton which translated to them receiving thirty five dollars and thirty three cents as first payment be reviewed. According to BSI/ASR, while the estimated price is lower than the last two crops, which was approximately forty three dollars, it is in range with prices paid in the ten year period before the last two crops which was around thirty seven dollars. BSI said in its letter it reiterated its own disappointment with the cane price estimate, especially given the dramatic fall from levels realized in recent crops. It goes on to say it has considered the arguments put forward by farmers carefully and explained the reasons why the assumptions which led to the can price estimate are considered realistic and cannot at this time be adjusted to improve the cane price. The main assumption is the estimated price for sugar exported, which reflects current market realities in the European Union market and over which Belize has not control. Because of a sharp fall in the EU prices, this is much lower than in previous years. Farmers had noted a European Commission report citing higher price than that in BSI’s estimate. BSI clarified that this price reflected sugar which had arrived in Europe during 2015, including from Belize, but which had been contracted in advance when prices were higher. BSI says the real price of sugar contracted today is reflected in the cane price estimate and is similar to prices being paid to other Caribbean countries. In its letter BSI also addressed the request by farmers for the company to provide a more ambitious estimate for cane quality. BSI points out that as a result of the delay to the start of last year’s crop and the quantity of stand over cane that is to be harvested this coming crop, it is likely that a combination of weather and old cane will reduce the cane quality from the excellent levels achieved last crop. However it notes that nay improvement in any of the assumptions realized during the crop would be fully accounted for and paid to farmers in the second and third payments for the 2016 crop. The company urges the associations to work with the company and Government to develop a strategic plan to improve the efficiencies in the industry to make it more competitive and sustainable against the challenge of falling EU prices. It adds it also working hard to bring additional support to the sugar industry of Belize from the development community such as the Inter-American Development Bank and other institutions.