SUNS 4502 Friday 3 September 1999

Caribbean: Another chance for the regional sugar industry?



Georgetown, Sep 1 (IPS/Bert Wilkinson) -- When American commercial giants like Pepsi and Coke moved into populous China and India in the last 10 years, the demand for cane sugar soared and many in the Caribbean and other sugar-producing nations felt that this was the perfect opportunity for them to expand this
vital foreign exchange earner.

But apart from Guyana, on the South American mainland, few of the other countries in the region had the land capacity to increase production and therefore few could respond to the opportunity to rake in some extra hard currency.

But now there is another chance for the region to earn nearly $70 million in additional revenue because drought in the island- nation of Mauritius in the Pacific region has left a shortfall of at least 130,000 tonnes of sugar to the key European Union market.

Mauritius, which produces on average more than 600,000 tonnes of sugar annually, is by far the largest producer in the African, Caribbean and Pacific (ACP) group of countries that sell sugar to the European Union (EU) under a special protocol set aside for former European colonies. Fiji comes next, followed by Guyana.
But bad weather in Mauritius has forced authorities to tell the EU that it will fall short on its quota for the first half of next year.

Whenever this is the case, it is common EU policy for other sugar-producing countries to be given the chance to sell more, thereby preventing buyers from looking for other sources outside of the ACP.

In this case, Guyana has indicated that it could sell up to 77,000 of the 130,000 tonnes that Mauritius will forego, leaving the remainder to other regional, African and Pacific countries to fill.

This would bring in nearly $30 million in foreign exchange earnings.

The fact that Guyana could be among the first to take up this shortfall speaks volumes for an industry which a decade ago appeared ready to go under.

Production in 1989 reached 129,000 tonnes, the lowest in many decades as strikes and other problems plagued the industry.

The following year the World Bank and the International Monetary Fund (IMF) encouraged the administration to hand over management to the British-based Booker Tate.

Ironically, Booker Tate had up to 1976, owned the industry for decades before the then Forbes Burnham administration nationalised it.

In less than 20 years Booker Tate was back, albeit on a management contract rather than as owners. Things almost immediately started looking up.

Production began to climb again, clearing the 200,000-tonne mark in the early 1990s and now heading to 300,000 tonnes this year.

If this level of production is achieved despite current unseasonal rainfall extending two months beyond the normal rainy season, it would represent a comeback for one of the country's main foreign exchange earners.

The 300,000 tonnes expected this year would mean that this is the first time in more than 20 years that levels have reached such heights.

"We have done very well and are in a position to export most of our production. I think 1989 was the year that effected the turnaround as we had nowhere else to go. We had reached rock bottom, " says Marketing Executive Kirk Douglas. Land cultivation has increased and so have market opportunities, he adds.

Guyana's relatively small population of 750,000 consumes just 24,000 tonnes of sugar per year. Other Caribbean countries buy another 20,000 tonnes.

The US market, steadily reducing its purchases from the Caribbean each year, requires just about 12,000 tonnes.

But all is not smooth sailing for an industry which Agriculture Minister Reepu Daman Persaud says must aim for at least 500,000 tonnes in a few years.

Government takes away millions of dollars from the industry in a tax levy that goes to other areas of development. Many, like Indian rights activist Ravi Dev, thinks this is a foolish move and helps to stifle growth. Most field sugar workers are East Indians, brought here in the early 19th century to replace blacks
on coastal plantations.

"Sugar workers do not need to know that the levy will be decreased or capped - the levy must go," says Dev keeping up the pressure on the administration to abandon the policy and use the money to increase wages and salaries to workers.

Meanwhile, it is hardly like that Jamaica will be able to take up the challenge to make up the shortfall brought about by the Mauritius situation. For almost five years now the industry has been struggling to survive. For the 1998/99 sugar crop there is a shortfall of 160,000 tonnes of sugar cane. This means that the industry stands to lose just under eight million dollars in potential earnings

Barbados too has not been having a smooth ride as far as the sugar industry is concerned. Levels have been below target and in recent years this eastern Caribbean island has had to import sugar from Guyana and Guatemala to satisfy demand.

At the same time Trinidad and Tobago has been battling the frog- hopper infestation. This pest eats away at the roots of the cane plant, leaving them lifeless and devoid of juice. In 1998 some 95,000 tonnes of sugar were produced, down from the 125,000 tonnes anticipated.