The first estimate for prices of raw sugar cane has been released, and it is a blow to farmers in the North who have a record amount of cane in the field for
the upcoming sugar crop. Producers American Sugar Refining/Belize Sugar Industries Limited (ASR/BSI) have estimated a price of $41.56 per ton, with some 1.225 million tons of cane available from which BSI expects to mill 129,000 tons of sugar. However, according to former BSCFA president and branch leader Alfredo Ortega, there is more than that amount available. According to BSI officials the low estimate price reflects the prices in the EU market. With a further explanation here is BSI financial director Belizario Carballo.
Belizario Carballo, Financial Director, ASR/BSI: All of that plus a number of other factors combined to make last year’s price $75 in that range compared to this now price estimate, which now reflects the prices that are prevailing in the EU Market because it’s now a new contract, and the new contract essentially provides for us to receive the price that Thatanile Sugars is able to purchase sugar from ACP countries like Belize, in other words, country who can import or export sugar into Europe at duty free terms. And so the average of that price will be what the contract will provide for
ASR/BSI claim to have started seeing this since last year but it did not have an impact then due to prices in former contracts with Tate & Lyle, Belize’s main sugar partner, that extended to the 2015 crop. The drop in the EU market is below the minimum price of 4.25 euros that was in the last contract with Tate and Lyle. ASR point man in Belize Mac Maclachlan says it is not something they can control.
Mac Maclachlan, VP International Relations, ASR: That price is the market price in Europe. Sugar is a global commodity, and it’s a commodity price. It’s not something that the BSI controls, it’s not something the government controls, it’s not something cane farmers associations control, it’s a market price. For the last 2 years now we have been warning the industry collectively of the likely impact that changes in the EU Sugar Regime are going to have. These changes are affecting all sugar producers who have enjoyed preferential access to the EU market in the past. The same conversation are taking place in Jamiaca, Guyana, Barbados and taking place here. We have been working with farmer association and with the government.
According to Carballo, BSI were receiving up to about 100 euros more over actual prices last year which hiked up the prices for farmers to as much as $75; the new estimate price reflects the actual price now in the EU market and which is in the new contract with Tate and Lyle. BSI forecasts that prices in the EU and world markets will grow closely aligned over the next few years and will fluctuate as a result of the removal of regulation in Europe over beet sugar. BSI officials say this drives the need to focus and work on the Strategic Development Plan that had been signed on by farmers in the contract with BSI to adjust to the changes and remain competitive. BSI and stakeholders are yet to conclude an estimation of how much cane is produced for the new crop, taking into consideration the impacts of the drought and if there is more cane than estimated it is important to start the crop early. There is no exact date for the crop to start as stakeholders haven’t met to decide that but tentatively the proposed date is November 30th. The new BSCFA committee of management chair Leonardo Cano says he will reserve comment until after a meeting with members today. BSI will have further comment on Wednesday.