GuySuCo’s dismal performance this year will cost it roughly US$14.4m ($3B) in its shortfall to the guaranteed European Union (EU) market.
With only 135,000 tonnes of sugar (US$60.75m) exported to the European market as of the end of November, GuySuCo would not meet the European Union’s quota, Chief Executive Officer Paul Bhim said yesterday.
The EU quota is 167,000 tonnes and shortfalls made up for other countries have sometimes taken Guyana’s annual figure to 185,000 tonnes.
Total production for the year as of yesterday was pegged at 186,000 tonnes, with the minimum production rate of 232,000 tonnes of sugar for its international and local quotas not in sight as the corporation continues to slide towards a large deficit. However, Bhim stated that the corporation would suffer no injury through undersupplying the European market since there were no penalties attached to the commercial contract. He also indicated that the local market would not be harmed by the shortfall.
In previous years, under the former EU sugar regime, countries like Guyana risked cuts to their quota if there were shortfalls. The revamped EU sugar regime has however made more sugar readily available to the EU market. The big loss however is to GuySuCo and the country.
The sugar corporation has been bleeding money for the last several years and has benefited from large state subventions. The loss of US$14.4m from its guaranteed market is another major blow in its recovery plan.
In the past, Guyana has been forced to import sugar since all domestic sugar production was sent to fulfill the U quota.
Earlier, in November Agriculture Minister Dr. Leslie Ramsammy had said Guyana had shipped 195,000 tonnes of sugar to the European Union for the year, drawing questions from critics who asked where the extra sugar came from. At that time the corporation had produced just over 155,000 tonnes of sugar.
The corporation’s low production level does not bode well for the future of the sugar industry, particularly after 2017 when the European Union would end sugar quotas for the African, Caribbean and Pacific (ACP) group of countries.
Guyana’s Brussels-based Ambassador to the European Union PI Gomes had previously told Stabroek News that Guyana should focus on moving forward and looking toward 2017 when the sugar industry would change drastically.
“Our key focus has to be to get production and productivity up as prices are good at present and over [the] next few years. So by 2017 when EU beet farmers, who have quotas till 2017, the market will be very unstable as many EU beet will jump into a lucrative market and prices will come down…plus many of them have re-tooled factories to refine both beet and cane sugar,” he had said.
Guyana’s sugar industry was to have improved with large sums injected by the EU following the revamping of the EU sugar regime. The industry’s performance has however steadily deteriorated and the government has not stated what emergency steps will be taken for a turnaround.
