ORANGE WALK TOWN, Thurs. Nov. 12, 2015–Belizario Carballo, Chief Financial Officer of American Sugar Refinery/Belize Sugar Industry (ASR/BSI) told Amandala that they have issued the first cane price estimate of $41.56, which is not the final price. Carballo said the agreement between BSI and the cane farmers is that the farmers get 85% of the price, and based on the estimate of $41.56, the farmers will be getting $35.33 per ton. Carballo added that last year BSI bought 1.2 million tons of cane from the 5,400 farmers.
Oscar Alonzo, Chief Executive Officer of the Belize Sugar Cane Farmers Association, said that they were aware that the price of sugar was falling on the world market, but they didn’t expect the price decline to be so drastic, and didn’t expect it this year. Alonzo is afraid that at the new estimated price, the payment to farmers might not be sufficient to cover the farmers’ expenses. Alonzo said,” The BSI are using 9.5 tons of canes to produce 1 ton, but believe that they can use 9 tons per 1 ton of sugar, which will increase, the price between $48, to $49. The payment to the farmers would then be, between, $38 to $39, allowing the farmers to better sustain themselves.”
Carballo pointed out that even though there will be a drop in the price based on the estimate, the first payment to the farmers is within the range of the average payment these farmers have been receiving for their cane, prior to 2014 and 2015 when the first payment was $42.
Carballo said that BSI is scheduled to start processing the 1.25 million tons of cane on November 30 to be completed in 26 weeks. Carballo said that if they are on schedule with processing the cane and there is excess they will be able to process it, however, they are unable to extend the crop when they start late which was a problem they experienced last year.
Carballo said some years ago there was a control quota restriction in the European market whereby BSI was only allowed to supply 42,000 tons; however after 2006 that changed and they now have unlimited access.
Carballo pointed out that they were protected from the lower prices because of the contract with Tate & Lyle which expires at the end of this year. They will be entering a new contract with Tate & Lyle based on the average price of sugar purchase from African Caribbean & Pacific (ACP) countries during the market period which runs from October 2015 to September 2016. The ACP countries have preferential access to the European market since they don’t pay duty on the sugar they sell to the market.
The sugar industry has four markets: 10%, or 13,750 tons, of its sugar is sold to the local market; 8%, or 11,000 tons, is sold to the USA market; 2.2%, or 3,000 tons, is sold to CARICOM and the balance is sold to the European market. Carballo said they have future plans to sell more sugar to the CARICOM market.
Carballo said, “The government, industry and farmers have plans to work together to develop a strategic plan that will increase the efficiency and the competitiveness of the industry.” In the wake of these developments, now would be a good time to accelerate efforts of executing that plan, Carballo said.