Calling for a commission of inquiry into the sugar industry, GAWU has slammed GuySuCo over last year’s “disappointing” performance and accused it of producing the sweetener at a whopping US$40 cents per pound, harvesting young canes during the second crop and failing to negotiate a better sales deal with Tate and Lyle.
The attack by the Guyana Agricultural and General Workers Union (GAWU) is politically significant given its close ties to the ruling PPP/C and will be taken as another sign of the crisis in the industry.
In the November/December, 2014 edition of its newspaper Combat, GAWU excoriated GuySuCo, noting that last year’s production of 216,142 was the second lowest production in 24 years. It noted that even this figure was 3,000 tonnes below the corporation’s own target.
It also charged that in a bid to get close to its target, GuySuCo had harvested immature canes and this will impact on this year’s target.
“The pre-harvesting of young canes on a number of estates during some weeks in November and December, 2014 was not only senseless and costly, but will compromise the production potential of the first crop (this year)”, GAWU said.
Other analysts had raised concerns that GuySuCo was reaping young canes but the corporation has not addressed this matter. Analysts have said that young canes are being reaped because GuySuCo has not had a rigorous replanting exercise in recent years and so there aren’t enough mature canes in the fields.
“Was it the decision of the Board of Directors to harvest a significant quantity of pre-ripened cane, of which the tonnes cane per tonne sugar (tc/ts) ratio was poor despite the favourably sunny weather which usually enhances the sucrose content of the cane?”, GAWU asked.
It further contended that despite the all-round resources of the Corporation, it is understood that the cost of production which it said was over US40 cents per pound continues to climb as a result of mainly poor cane quality. GuySuCo’s US$200M sugar expansion project under the Jagdeo administration had been intended to bring down the cost of production to US17-19 cents per pound but this has not been possible. The centre piece of its expansion programme, the Skeldon sugar factory has been an enormous burden on the industry and is now reportedly producing the highest costing sugar in the industry.
Indebted
GAWU also charged that this year the industry finds itself more indebted than it was previously and this has been worsened by poor decision making on sales via Tate and Lyle.
“Suppliers’ payments for service and materials are delayed for months. The present cash flow position of the Corporation would not have been in such dire straits had the Corporation agreed in late 2012 to a three-year contract to supply the 190,000 tonnes sugar to the Tate and Lyle market. For three years – 2013, 2014 and 2015 – the Corporation would have been receiving over US$700 per tonne of sugar.
The Corporation insisted on a one-year contract only for 2013, unlike the Jamaican sugar industry which has negotiated with Tate and Lyle a three-year contract for years 2013, 2014 and 2015, and is paid US$750 per tonne sugar. The latest shipments to Tate and Lyle in November/December, 2014 by GuySuCo merely attracted US$340 per tonne”, GAWU argued.
It added “The GAWU believes that while it’s long overdue to have a comprehensive Enquiry into the operations of the sugar industry, such Enquiry must not be delayed further if the important tentacled industry is to be saved from collapse”.
The industry has encountered a series of problems over the last decade including the burden of the Chinese-built Skeldon factory, the revamping of the European Union sugar market and the slide in prices, poor field husbandry and declining labour pools.
Successive turnaround blueprints by GuySuCo have failed to reverse the deteriorating performance and the high debt. Sugar production was meant to be averaging between 350,000 and 400,000 tonnes at this juncture. However, it is nowhere near this and 2013 saw dismal production of 186,000 tonnes and the lowest ever first crop tally in the industry’s history.
The crisis in the industry also poses a direct problem to President Donald Ramotar who was a director on the Board of GuySuCo from 1992 up to 2011, years after the crisis in the industry had begun.
