Cuban sugar industry restructures as another bleak harvest looms

HAVANA, (Reuters) Cuba has carried out a root and branch restructure of its sugar industry in a lastditch attempt to keep mills from folding in the face of collapsing output.

In recent weeks, the government has made 56 sugar mills subsidiary companies of state sugar monopoly AZCUBA and incorporated local plantations into the new entities, allowing them to leverage recent reforms that include setting wages and cane prices and keeping control of 80% of their export earnings. The Communistrun country produced just over 800,000 tonnes of raw sugar last season, its worst performance since 1908 and just 10% of a high of 8 million tonnes in 1989. Experts consulted by Reuters say 2022's production could be even lower.

"The industry has more or less collapsed. The situation is worse this year than last and it will take time to bring it back," a local sugar expert said, requesting anonymity as he was not authorized to talk with journalists.

The Caribbean island nation has suffered from both the effects of the coronavirus pandemic and tough new U.S. sanctions, reducing its hard currency earnings over the past two years by around 40%, shrinking the economy 13% and reducing resources available to mills and plantations.

Provincial media has been filled with stories of cane shortages, mill repairs behind schedule, and a lack of tires, batteries and fuel to harvest and transport cane. Cuba's economy long relied heavily on sugar exports, but output has plunged since the breakup of the Soviet Union in 1991.