Sugar earnings down by US$10M
In the wake of slumping sugar production, the government is projecting growth in the economy of only 2.5% this year compared to the originally estimated 4.7%.
In the half-year report tabled in Parliament yesterday, Finance Minister Dr Ashni Singh noted that the 2009 budget had estimated the real growth of the non-sugar GDP at 1.8% and overall growth at 4.7%. Given sugar’s dismal performance to date, these figures are now 1.5% and 2.5% respectively.
Singh’s report, which was statutorily due by August 30, 2009 and was dated September 25, 2009 when it was presented to Parliament yesterday, said because sugar returned the lowest first crop figure in a decade the overall real output for the 1st half this year had declined by 1.4%.
The 83, 357 tonnes of sugar produced in the first half was 19.3% below last year’s performance. “Higher than expected rainfall has been cited as a factor hindering the harvesting of canes. In some fields, this caused an overflowing drainage system, which encroached upon planted canes, either destroying or rendering them difficult to harvest”, Singh lamented. He noted that these conditions would also affect the second crop to the extent that the annual production target would be slashed to 249,521 tonnes compared to the original budget projection of 290,000. Industry insiders have since said this figure has been cut further to 234,000 tonnes amid a wave of strikes and other problems.
Earnings from sugar were also significantly down. Singh said that export earnings registered a 17.2% or US$10M decline from last year June’s figure of US$57.8M. This was attributed to a 13.7% drop in the export volume due to lower production and a decline in the average export price of 4.1% due in the main to the second phase of cuts – 9% – in the price for sugar under the Sugar Protocol.
Rice
Singh said that rice output was budgeted to decline by 7.1% due to weather and market conditions. However, because of more favourable weather the first crop at the end of June 2009 yielded 160,868 tonnes translating into a lower shortfall of 6.7% as compared to the 2008 first crop. He said that the annual target is being maintained at 306,156 tonnes – reflecting the drop of 7.1% – even though the sector has signalled the possibility of higher output.
Rice export earnings however amounted to US$59.4M – 17.6% – above the US$50.5M notched up in 2008. This was attributable to the 37.6% rise in the amount of rice exported which offset the 14.5% drop in the average export price.
Bauxite
Bauxite witnessed a steep output decline of 31.8%. With aluminium prices remaining below 2008 levels, bauxite output is now projected to slump by 22.1 percent compared to 2008 levels. Bauxite export earnings dropped by US$26.1M. This was as a result of production falling from to 740,142 tonnes from the 1,214,891 tonnes at the end of June last year.
Gold declarations at 131,550 ounces amounted to a 7.7 percent rise over the June 2008 figure. Diamond output rose for the first time in two years by 5.9% to a record of 87,346 metric carats. Gold exports raked in US$119.8M, some US$17.4M over the preceding year.
In the timber sector, the half-year report said that the improvements in compliance by harvesters with new enforcement and management mechanisms as well as better weather conditions influenced a marginal growth of 0.3% in the forestry sector. The value of timber exports –US$16.5M – was however 30.9% below the figure for the comparable period last year.
With the global meltdown, the report said that inflationary pressures have remained low and as a result the inflation target has been scaled back from the projected 5.2% to 3.2%. The figure was 1.3% for the first half.
Central government revenues totalled $48.4B for the first half or $6.1B above the 2008 figure. Value added and excise taxes equaled $21.3B as opposed to $17.6B at the end of the first half of 2008.
Guyana’s total external debt climbed by US$27.2M from December 2008 to June 2009. In the first half of the year actual debt service payments totalled US$6.8M, down by 22.5% from the 2008 figure of US$8.8M. The drop in debt service, the half-year report said, was attributable to a decline in central government repayments by 39.8% as a result of debt relief obtained from the IDB and the World Bank under the Multilateral Debt Relief Initiative.
