As of August 31, 2020 the total indebtedness of the Guyana Sugar Corporation (GuySuCo) was $72.5b and its cost of production was above the price of all markets it sold into.
This was disclosed in parliament yesterday when Minister of Agriculture, Zulfikar Mustapha answered questions in writing in the name of APNU+AFC MP Jermaine Figueira.
To the question from Figueira of how much direct assistance had been provided to the corporation over the last ten years ending in August 2020, Mustapha said the figure was $20b for 2010 to 2014 but he was unable to say what the figure was for 2015 to July, 2020.
Referring to the latter period, he said “This was a murky period of which we are uncertain about since NICIL (National Industrial and Commercial Investments Limited) and SPU (Special Purpose Unit of NICIL) and other agencies would have received and collected monies that is not reflected in the records”.
As to the question of the cost in US$ for GuySuCo to produce a tonne of sugar for each year between 2010 and 2020, Mustapha listed the average cost per metric tonne annually for the last 10 years as US$747.38.
This figure would translate into 33 US cents per pound. The world market price for sugar currently hovers between US 14 cents and 18 cents per pound, underlying that Guyana remains a high cost producer of sugar.
While Guyana is producing sugar at US$747.38 per tonne, it has not gotten a price higher than this in any market in which it has sold the sweetener. This essentially means it is selling at a loss in all of these markets though it is gathering foreign exchange.
Figueira asked Mustapha what was the world market price for a tonne of sugar in US$ in the last 10 years and the price per tonne received from its overseas customers.
Mustapha’s reply was that the average world market price for sugar over the last decade was US$$388.57. He listed the price per tonne received from the following markets as follows: European Union (US$445.23), US (US$593.05), CARICOM (US$581.30), regional non-CARICOM states (US$741.04), Australia (US$623.90), Italy (US$488.27), the Middle East (US$708.24), UK (US$540.05).
On the question of what percentage of GuySuCo’s income was taken up by the employment cost and debt servicing in the period 2010 to 2020, Mustapha said the employment cost took 71% and debt servicing 2.5%.
In relation to the question of GuySuCo’s total indebtedness, including all bank loans and arrears to the Guyana Revenue Authority (GRA) and the National Insurance Scheme (NIS), Mustapha listed the figure as $72.5b.
The Minister noted that the cost of production of sugar must take account of contributions that the corporation was making in relation to drainage and irrigation for surrounding communities, rice and other crops as well as residential areas. He also cited community health care services and sports facilities though a number of these functions were hived off from GuySuCo under the APNU+AFC government.
Mustapha added “It’s also very important to note that over the last three years, the former government placed more than seven thousand…sugar workers on the breadline and this (caused) severe disruptions in their families and killed the village economies in the areas of the closed estates”.
He also said that a large percentage of the $72.5b debt is owed to the GRA and NIS. He also cited the $30b borrowed by GuySuCo/NICIL/SPU and said that the whereabouts of this loan is not clear to the corporation.
“Hopefully, the Auditor General’s Office will bring some clarity to this matter”, Mustapha said.
