By Marcelle Thomas
Recent sugar production figures for this year show continuing dismal performances with the industry already short of even half of its projections; the Rose Hall Estate is the worst of all, coming in at only at 33% of its budgeted figures as of last week.
Records seen by Stabroek News, which show this year’s figures as at October, reveal that the sector was projected to produce an unambitious 59,108 tonnes of sugar, but has only produced a total of 26,783 tonnes to date. It seems unlikely that the deficit of 32,325 tonnes could be made up in the little time remaining.
A breakdown of the performance to date is shown in the table below.
In August this year, this newspaper had reported that even as the corporation’s audit for last year was still to be completed, projections were not bright as GuySuCo recorded back-to-back losses of $7.8 billion and $10.2 billion in 2021 and 2022 respectively with this year recording the lowest first crop in its history.
Newly appointed Chief Executive Officer Paul Cheong was asked by Stabroek News in an exclusive interview about losses for the period from 2021 to 2023. He provided the 2021 and 2022 figures, and disclosed that last year’s books were not yet audited.
The extent of the losses in the wake of large state subsidies to the industry will raise further questions about the government’s strategy. In its 2020 manifesto it had vowed to reopen three estates that were shuttered by the APNU+AFC administration. It has since reopened one, Rose Hall.
In 2021, GuySuCo produced 57,995 tonnes of sugar and in 2022, 47,049 tonnes, while last year it was a little over the 60,000-tonne target it had set at 60,204 tonnes.
The aim this year is 100,000 tonnes, but with the first crop the lowest it has been in GuySuCo’s history, even if the second crop is strong, meeting the target seems impossible at this time. One source with knowledge of the industry and the corporation said that “even with an optimal second crop, meeting last year’s target doesn’t currently seem likely.”
It is unclear what the corporation’s production cost per pound is currently but its new CEO said that it sells both packaged and bagged sugar to CARICOM and outside of CARICOM? as well as North America and Europe. “Pricing is based on territory and is sensitive so we will not divulge such information,” he said when asked about costs.
Production cost per pound of sugar has previously been a widely available statistic and had been the single most important metric in pursuing the failed Skeldon Sugar Modernisation Project (SSMP).
In 2020, the production cost was US 42.84 cents per pound at a time when the average global price was US 28 cents. The SSMP had been aiming at around US 10 cents.
While not inclined to give the dismal numbers of the 2024 first crop production, Cheong said he wanted to focus on the positive as plans were forging ahead to make up and reach the set 2024 target.
El Niño
“The first crop was bad because of El Niño… It was one of the worst crops in history,” Cheong told Stabroek News in an interview late last month. He said that the low figures were not because of poor management but mainly poor weather and the Albion estate not working. “Albion didn’t work last crop and it affected efficiency because we had to move the crop to Rose Hall… Cane deteriorates with time and you get poor recoveries,” he explained.
In August also, GuySuCo announced that its second crop for this year was delayed.
“The delay in the start of this crop which was scheduled to commence mid-July was due to the heavy rainfall which persisted in the fields for the past weeks,” a release said.
“Our estates have been ready since mid-July, but the weather was not in our favour. The soggy conditions in the fields were really unsuitable, especially for mechanical harvesting, since we would have risked damaging ratoons and affecting our future yields. But we are happy that we have seen a break in the rains and we are ready to commence production this week,” it had quoted Cheong as saying.
The release informed that the Albion, Rose Hall and Blairmont estates were scheduled to commence the burning of canes, while Uitvlugt estate would start toward mid-August.
“The Uitvlugt estate is still experiencing unfavourable weather conditions, with rainfall measuring 32.1mm last Sunday, August 4, 2024. Based on the amount of rainfall and sogginess in the field, Estate Manager Hutton Griffith suggested that harvesting will commence closer to mid-August,” according to the release.
During the interview with this newspaper, Cheong was asked about the major fire earlier this year at the Albion factory control room and if it would affect production.
There was a major fire at the Albion Estate on February 3 this year. He pointed out that it resulted in extensive damage to the bus bar that housed the 4MW turbine alternator control panels. A 2.5MW control panel and interbus transformer panel and switch gears were also damaged. However, Cheong said that by the end of March they were rebuilt and testing showed no adverse effects. He informed that “full load testing with the entire factory operational will be done on the commencement of the crop. We don’t foresee any difficulty. Despite the fire, we were able to grind all of Albion’s cane at the Rose Hall Factory.”
Asked about the state of the Rose Hall estate based on the couple months of grinding, he replied, “Rose Hall has shown significant improvement from its first run in the second crop of 2023. With the projected improvement in supply of canes in this second crop, we anticipate an improved run.”
“This factory was parked for several years and we will continue to evaluate performance and make changes as is necessary and as required. We are working for the improvement of recoveries in all the factories and Rose Hall is no exception,” he added.
Given that President Irfaan Ali had spoken about cultivating more cane at Skeldon, Cheong was also asked a number of questions about that factory during the interview.
Back in May, and stressing that his government continues to work to build the sugar industry by modernising the fields, Ali had said, “5,000 hectares here in Skeldon we are going to put back into production, whilst we are doing that we will be opening up opportunities for more than 50,000 acres of new land so that we can have new land available for our farmers, we are investing in that.”
Asked about the reopening and if it was not the case that this was a pipe dream, Cheong told this newspaper, “We have begun cultivation at Skeldon for the long term. Simultaneously, we are evaluating the factory to determine the best option based on new technology and what we already have available to us.”
With 8,179 people in the corporation’s employ, he said, “there are 5,368 field workers out of an establishment of 7,600.” He said the corporation has intensified mechanisation to help mitigate the 2,232 labour deficit. And mechanisation, he underscored, was a big part of the future for GuySuCo as there are plans to adapt the industry so it can be developed to meet the changing global times.
Cheong expressed confidence that the sugar industry could be resuscitated to once again become profitable, and in the short term GuySuCo said that its management “is confident that amidst the minor delay, the overall crop performance will not be affected.”
The duration of the second crop of 2024 is 19 weeks and should conclude by the first week of December.
