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    October 20

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THE ISSUE: More challenges lie ahead

SHAWN CUMBERBATCH, shawncumberbatch@nationnews.com

Added 11 January 2017

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IN AN ENVIRONMENT of negative economic news, and with the expectation that 2017 will be another difficult year, optimistic Barbadians would have been happy to see the DAILY NATION’s front page headline last Tuesday.

Sweet Crop, it stated. The report said sugar industry officials forecast a 50 per cent increase in output from this year’s harvest, and further gains in 2018.

Barbados produced 8 000 tonnes in 2016, and 2017’s number was expected to increase to 12 000 tonnes, mainly due to the output of private farmers within the Barbados Sugar Industries Limited group.

The reality is that there is still a lot of uncertainty surrounding the future of sugar cane cultivation and sugar production in Barbados.

Since the news came more than ten years ago that the preferential treatment the European Union offered to sugar producers in the Africa, Caribbean and Pacific (ACP) would end, the onus has been on Barbados and others in the region to reform their industries.

Some countries, including St Kitts-Nevis and Trinidad and Tobago, have ended sugar production altogether and others have reformed their sectors. It is a process that Barbados has been involved in for several years, one in which it is still to reach a resolution.

As Barbados moves slowly with its sugar industry reform, the clock is ticking on at least one important aspect of the sector.

BARBADOS BUSINESS AUTHORITY confirmed that effective October 1, beet sugar and isoglucose quotas will be abolished, thereby creating a more competitive market in Europe.

The policy change means European Union (EU) beet sugar and isoglucose producers will be free to increase and sell all their output within the EU market.

Commenting on the issue recently, the ACP Secretariat said this was likely to result in a reduction in imports, and therefore a further reduced market for countries like Barbados.

The ACP Sugar Group is currently chaired by Barbados’ Ambassador to Belgium Samuel Chandler. Commenting on the planned EU quota changes, the group said “the sugar industry is widely recognised as making “a significant socio-economic contribution to many ACP states, particularly in generating export earnings and creating employment in rural areas”.

“The ACP Sugar Group includes some of the world’s lowest cost sugar cane producers whose production has been growing over time. It also includes some higher cost industries, where cane production has been falling and the milling sectors are suffering from poor financial performance,” it added.

A recent EU study concluded that ACP sugar producers were at varying states of readiness for the market changes expected when quotas are abolished.

Two months ago, at its 165th annual general meeting in Kingston, Jamaica, the Sugar Association of the Caribbean (SAC)reported that regional sugar production was about 450 000 tonnes  for 2015/16 period.

SAC chairman, Jamaican Karl James, said its members, including the Barbados Agricultural Management Company, were paying more attention to the US market and Caribbean markets where the price paid was better than Europe’s.

A report on the meeting, published by the Jamaica Gleaner, said that in conjunction with some members of the London Sugar Group, SAC members discussed the likely implications for sugar when the United Kingdom leaves the EU.

The news report said SAC members recognised that there were opportunities for sugar, possibly within the context of a UK-CARICOM Free Trade Agreement.

Recently, the US Department of Agriculture said global production for 2016/17 “is up five million metric tons (raw value) to 171 million as gains in Brazil and the European Union and most of the top 25 producers more than offset declines in India and Thailand”.

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