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Sugar payments not too sweet for farmers

Sugar is not as sweet, as no one is making any profits from sugar this year. That’s the word coming from the Belize Sugar Industries (BSI), as the payments, so far, are under the production costs incurred by producers. The company has released the figures for the estimated second payment price, and it’s causing some serious concern among sugar cane farmers. That estimate stands at $45.47 per ton, meaning that farmers will receive an average of about $4.88 per ton of cane delivered in their second payments. Again, that is an average payment. Since farmers are paid on the relative quality of the cane they deliver, some will receive payment below the four dollar mark. Dalila Ical has more.

Dalila Ical: There is growing concerns among Sugar Cane farmers since the price has dipped significantly. The second estimated payment is at forty five dollars and forty seven cents now this is an increase from the first estimated cane price but famers will still be payed a lot less than in previous years. It is not unexpected as the industry has been bracing for such impacts following the changes of the EU Regime back in 2017 and continuous drops in sugar prices on the world market. Still the reality has farmers seeing a grim future in the Sugar Industry, that is because although the estimated price has been set at one figure, farmers are paid depending on the relative quality of their cane delivered to the mill. Cane Farmers Relations Manager at BSI/ ASR Olivia Avilez explains.

Olivia Avilez: About forty five-forty seven is the estimated price of cane. The payment to farmers is done during the crop; the first eighty percent and then up to ninety one percent is done in second payment. So for second payment an average price that farmers will be getting is around four dollars and eighty eight cents with some of the highest groups, quality groups earning around $6 per ton of cane in second payment. Again second payment is based on the relative quality of the different groups; they are seventeen test groups of quality and so each will be paid their corresponding relative quality.

Dalila Ical: And still some farmers may get even lower than four dollars because of the quality  of cane that was delivered for the this crop.

Olivia Avilez: Right we have a average, an industry average and they are groups that are above that and groups that are below that.

Dalila Ical: It is a significant drop in payment since only last year the second payments stood at a little over sixty dollars per ton of cane. That is a drop of around fifteen dollars.

Olivia Avilez: From last year to this year we have a drop of around twenty five percent in the cane price.However it’s not really fair to compare last year with this year because importantly this year we are post October 2017 which opens us to having to compete in the world market. Last year we were still protected under the preferential market so we were enjoying that. This year on the other hand is a complete different story and Belize is not immune to that activity.

Dalila Ical: But it could have been lower says Avilez.  She says that before the global market price dipped yet again, BSI was able to lock in its price when it stood at eleven cents per ton of sugar. The production of direct consumption sugar has also helped buffer the impact.

Olivia Avilez: This represents about thirteen and a half cents per pound of sugar as opposed to today’s number eleven price which is around eleven cents. Basically this is twenty five percent higher than the actual price the world is trading at. Forget the price at this moment, so there is a slight increase in the cane payment as opposed to what we initially issued at the start of the crop and really this is reflecting the benefits of the DC investments since we were able to make a little bit more DC sugars this year than last year.

Dalila Ical: Farmers are now concerned over their survival in the industry, but BSI believes the industry remains viable.

Olivia Avilez: We are doing our part to not discourage the famers and the industry because we still have a viable industry here in Belize. This year the prices are low but you know sugar is a commodity and it tends to oscillate, be cyclical so we don’t want to completely discourage the farmers but it is a business decision at the end of the day.

Dalila Ical Love News.

The final payment may be slightly higher but those numbers will be estimated after most of the sugar is sold and will be released in November of this year.