Sugar struggles in Guyana

Bert Wilkinson | 8/20/2015, 2:03 p.m.

Special to the AmNews

Just recently, authorities in Guyana set up a commission of inquiry to find out what exactly has gone wrong with their decaying sugar industry. The country has traditionally produced the largest amount of sugar in the 15-nation Caribbean trade bloc.

The move has much to do with the fact that annual production has been falling spectacularly in recent years, with the sector struggling to produce 200,000 metric tons of sugar compared with an average of approximately 300,000 not so long ago.

And even as the commission began its work in earnest, there were clear indications that large chunks of the sector might well be privatized, as successive governments have complained about being forced to find millions in subsidies to keep it afloat.

The move also comes as regional agricultural ministers continue meeting to review the state of an industry that once dominated the economies of nearly every single member state, dating back to European colonialism more than 350 years ago.

In 2005, the European Union, to which the region sells more than 500,000 tons annually, slashed import prices by 36 percent and announced plans to open a market that it had closed off to other exporters, such as Brazil and Australia, to a free-trading enterprise system. This announcement immediately forced authorities in Trinidad and St. Kitts to completely shut down their industries, as production costs were already too high for them to continue in the business of sugar production.

Additionally, in 2017, the entire European Union market will be fully trade liberated. Fixed prices and quotas that the region and producers in Africa and the Pacific enjoyed since the mid-1970s would be a thing of the past. Officials say this change makes it even more bleak for the remaining Caribbean bloc producers Guyana, Jamaica, Belize and Barbados, as production costs are already too high.

The regional ministers say the time has come for member states to add value to raw or bulk sugar production and to produce commodities such as refined and packed sugar for the regional market and to satisfy demand of the millions of North American ethnic market.

In the meantime, Nisa Surujbally, who is a sugar executive at the Guyana-based bloc headquarters, argues that the region can only produce approximately half of the 800,000 tons of refined sugar required for domestic consumption and for the manufacturing industry, noting that the demand for such is growing. The region must take account of this limitation, she says, as people in the value-added business such as jams and jelly production want refined sugar.

“They are all large consumers of sugar, which unfortunately we have to import,” she said.

Latest figures show that she has the support of John Ford, a United Nations representative from its agriculture division.

“The future of the sugar industry is tied to diversified products. Bulk sugar will be shipped for a long time to come, but we have got to get more refining of our sugar, going into specialized sugars and sugar markets and obviously sugar-based products,” he said as the region continues the uphill task of keeping a traditional behemoth sector alive.