As sugar prices continue to plummet on the world market and the local industry remains in a dire state, the European Union (EU) says that funds it has been using to help the sector will be depleted in two months and there is no more to be had.
“There are no more funds from this protocol. This is it,” EU Ambassador Jernej Videtič said when asked by Stabroek News if additional aid would be given to the sector.
From 2006 to September, 2017, the month when the last of the monies will be paid to the country, according to Ambassador Videtič, the EU would have provided a total of GY$348.5 billion in budgetary support to Guyana. It was geared at compensating for the cut in preferential market prices.
Asked if the EU was asked or would assist in providing a technical study on the feasibility of producing white sugar, the Ambassador responded in the negative.
However, Head of Co-operation at the EU Mission in Guyana Christof Stuck explained that technical assistance is only considered on request from government but to date no such help has been asked for.
“For technical assistance projects in the field of technical assistance for the government, it is on a request basis. That means that your government comes to us and says, ‘‘we need this expertise, XYZ,’ and then we will reply to that. But since the funds are limited, usually those technical assistance go hand in hand for the sea defences for future programmes, rather than looking back to past activities. The last technical assistance for the sugar programmes are running out… So, in theory, yes, it is possible on the request of the government. However, we haven’t received such a request so that is not an issue now for us,” he said.
The EU’s position came a day after the Guyana Sugar Corporation (GuySuCo) bemoaned the tumbling price for sugar worldwide even as its own cost of production has more than doubled the selling rates.
GuySuCo said that over the past six months, the world market price for sugar has fallen significantly in the range of US$250 to US$275 per tonne, which is around US12.5 cents per pound. Up to Wednesday, the price was US12.66 cents per pound.
GuySuCo noted that it supplies 65,000 tonnes of bagged and packaged sugar to Caribbean and local markets annually. Another 12,000 tonnes of raw sugar is shipped to the North American market, while the remainder, also raw sugar, is sold on the European market. The supply for Europe for the second crop of 2017 will total an estimated 70,000 tonnes.
According to GuySuCo, the current forecast is that there will be a surplus of sugar on the world market for the marketing year 2017/2018. In addition, from October 1, 2017, it said the EU market will also see radical changes since it is anticipated that significant additional amounts of beet sugar will be available for sale and this will compete directly with cane sugar. GuySuCo said that this may result in further reduced sugar prices in Europe.
Due to the competition with beet producers, the price paid by the refiners for raw cane sugar (as supplied by GuySuCo) will be more in line with the world market price, which currently is trading at US$275 per tonne and the forecast is that it will not increase significantly in the near future. The price at the start of the year was US$396 per tonne. This is far below the price GuySuCo received in its heyday.
“The anticipated lower prices for the sugar sold will not assist the corporation’s fragile financial position and poor liquidity will continue to pose a serious challenge in the upcoming Second Crop,” GuySuCo added.
