_{Photo: Plantation white sugar produced by BSI}

ORANGE WALK, Wed. May 16, 2024

Just four months after our last sugar shortage which saw Belize Sugar Industries (BSI) approved to import 250 metric tonnes of white sugar from the United States, we are back at reporting another shortage. According to Marcos Osorio, the Chairman of the Sugar Industry Control Board (SICB), they started getting reports of a sugar shortage about three weeks ago.

Last year’s shortage started around August and became acute in November and particularly in December when all the Christmas baking was happening. The imported U.S. sugar, which was two weeks’ worth of local consumption, cost up to $1.60 per pound. Trying to avoid a repeat of such a hike on consumers, Osorio said he and Agriculture CEO, Servulo Baeza held a meeting last week, and he then invited BSI to a discussion on the matter this Tuesday. Osorio was pretty annoyed at BSI, whom he accused of putting out a press release on the shortage just as the two parties were entering their meeting on Tuesday. He said it reeked of bad faith, which indicates that they are unwilling to work with Government to find a solution, even as they call on the authorities to fix the problem.

In its release, BSI revealed increasingly getting reports of a sugar shortage on the local market, and added that this is in spite of having increased the amount of sugar sold on the domestic market compared to the same period last year. As did Osorio after them, BSI concluded that this can only mean that the illicit cross border sugar trade “continues to be on the upswing.” BSI called for the Government to increase the price of plantation white sugar (which has not been changed in 9 years) and the price of brown sugar (which has not been increased in 23 years). The company stated, “The wide disparity between domestic prices and regional prices, combined with production shortages, particularly in Mexico, is creating a lucrative incentive for sugar to be smuggled outside of Belize. Until and unless this price disparity matter is addressed, Belize will continue to see pressure on its domestic sugar supplies.”

In the meantime, BSI says it has written its direct customers reminding them that sugar sold to them is meant only for the local market, and that if they are found to be facilitating smuggling of sugar outside of Belize, BSI reserves the right to stop selling them sugar. On this point, Osorio feels BSI has not done nearly enough to prevent contraband, given that they are the only ones that control the local sale of sugar. This time, he vocalized aspersions previously made in a roundabout way. He stated, “I can only believe that there is some will and intention of creating the shortage, because the miller insists that there should be an increase in the price of local sugar – for the local market.” Osorio also assumes that BSI must know which entities are engaging in contraband of sugar based on their warehousing and trucking infrastructure. He believes that a previous measure which was in place around 2013 should be implemented again. It required every wholesaler returning to purchase more sugar to show a list of businesses to whom they sold their sugar. If they could not produce that, then they would not be sold more sugar.

Even more worrying is the report out of Mexico that there will be greater demand for Belize’s sugar this year. Osorio says they have been notified that Mexico again had a shortfall in production. He added, “And I believe the same will be for sugar moving into Guatemala and even Honduras.”

The Government has, so far, resisted the calls of the miller and two sugar cane farmers associations to increase the price of sugar sold on the local market. Osorio remarked, “While a handful, or maybe two or three of the wholesale buyers of sugar from the mill who are, maybe, directly involved in the contraband … are filling their pockets, the local consumer must pay the cost of it.” He affirmed that he is not against the increase in the price of sugar, but he says it should not come as a result of contraband. He also indicated that even before a paper on the price of sugar can be presented to Cabinet, BSI needs to show what it costs to produce one pound of sugar. He says BSI has committed to providing that figure. According to Osorio, Mexico’s price per pound of sugar is currently at around BZ$1.56 but he believes it is that high because of the reduced production of sugar there at this time. The local demand for sugar annually is 12,000 tonnes of plantation white and 3,000 tonnes of brown sugar.

Sale of sugar to Mexico touted as a solution to sugar smuggling

During his latest trip to Cancun, Mexico, where he met with President Andrés Manuel López Obrador, Prime Minister John Briceño said they discussed exportation of sugar to Mexico. Osorio says the big challenge is tariffs that the Mexican Government imposes. He commented that if the tariffs were removed, the transport cost and handling would be more cost efficient than shipping and Belize should capitalize on it. He says both BSI and Santander Sugar would benefit from such trade. As to the availability of sugar, Osorio says BSI produces about 100,000 tonnes of sugar for export while Santander produces about 50,000 tonnes.