With a record breaking end to the 2016-2017 sugar cane crop season, Belize’s premier industry is now bracing for direct competition come October of this year following the recent EU reform on world sugar prices. While Belize will continue to benefit from quota and duty free access for 1.6 million metric tons of mostly raw sugar, Belizean sugar will be directly competing against EU beet farmers, simply translating to falling prices in the market for cane sugar.
For the past several days we have been reporting on the industry’s plan to remain competitive in the global market, specifically BSI’s proposed twenty two million dollar investment to increase the production of direct consumption sugars from thirty thousand tons to fifty thousand.
During a sit down yesterday with Vice President of International relations of the ASR group, Mac McLachlan- he explained the benefits of Belize yielding higher quantities of DC sugars.
Mac McLachlan- VP- International relations
“Oct 2017 has been forecast for a long time; the factors are that changes in the EU Market mean that there will be more Beet Sugar available in the EU, the EU has always been our traditional market here we have duty free access into the EU Market, in recent years it’s been produced by the high premiums to sugar cane, if you look a little longer term that’s not the case in recent years it produced a higher premium and that higher premium is going to fall away basically come October, it’s a bit of a cliff edge frankly because even before the 1st of October Beet Sugar Producers are free to sale sugar to the EU Market as they wish and that’s being compounded by the fact that as you understand that this is a market led by global figures, global prices that’s a global commodity market and these prices are affected by a number of things one of this is whether or not there is a surplus of manufacturing in the market or whether there is a deficit, in recent years there’s been a deficit, the world is not producing enough sugar as they need it, that has now turned and now we moving onto what we all a surplus period where there is no sugar in the world and that drives the process down as well, Belize doesn’t control the price of sugar, the price of sugar is a global commodity price which depends on the price you can access to we are limited here to the EU Market or to the Caribbean Market as a result of that is out of the hands of any of us as individuals but my message by end of this crop we have to look at what is in our control in order to move forward and make this business sustainable against whatever chances in the future.”
Now beyond looking solely at the EU market, Belize along with other CARICOM countries are looking into securing the Caribbean market for sugar- this according to McLachlan would increase Belize’s market for DC sugars.
Mac McLachlan- VP- International relation
“Beet Sugar is a different process and we have an advantage and we have a specific advantage in Belize within the Caribbean we produce some of the best Direct Consumption Sugars, those are food grade sugars that can be sold directly into the market they don’t need to go through the refinery and those sugars attract a high price in Europe and elsewhere in the world now we’ve been you know, looking at how we can mitigate the impact of falling prices moving forward and one of the ideas we’ve come up with is that we are going to produce higher volumes of these Direct Consumption Sugars, at the moment BSI produces around thirty thousand tons of DC, the Caribbean market is a slightly different thing, I mean, we’ve done all our calculations based on the EU because that is where we have our short sales, we are also working to with other sugar producers in the Caribbean to try and protect the Caribbean Market and more for Caribbean produce sugars under the terms of the CARICOM Treaty, at the moment there are loop holes in the way the common external tariff has applied which permits a lot of imported refined sugars to come in from the cheapest procuring countries such as Brazil, Guatemala and that is displacing around two hundred thousand tons of sugars that could be provided by Caribbean producers so with the government and with other sugar producing countries we are advance in our efforts to get CARICOM to agree to implement a more, you know an approach to the common external tariff that would provide a new market that’s even better, that’s one avenue but all of our calculation have been based on the EU Market.”
The hope is for the proposed investment to be put in place at the start of the 2017-2018 sugar cane crop season.