SUGAR

produced on May 1.

The Italian-owned company, whose main line of business is rum, said declines in sugar production to 40,000 tonnes this year – a steep descent when compared say to the levels in 2014 of 145,000 tonnes – has contributed to rising costs, largely from fixed costs associated with production.

But George Callaghan, CEO for the SIA, is insistent that now is not the time to be passing on costs to consumers for a basic food item.

“There is no justification whatsoever to increase sugar prices, especially at this time when the COVID-19 pandemic is devastating Jamaican consumers’ income,” he told the Financial Gleaner.

His last attempt to speak out against the price hike was in the week of June 26.

“The justification and timing of this proposed price increase cannot be substantiated and if applied will give the impression of rapaciousness and price gouging at a time when large segments of the population are laid off or have significantly reduced incomes as a result of the COVID19 pandemic,” the SIA head charged in a document placed before Minister Shaw.

But aside from voicing his displeasure, it appears the current price hike will stand. Callaghan seems to be focusing his efforts instead on policing future increases, hopefully with the blessing of Shaw’s ministry.

Sugar producers usually end up getting 53.3 per cent of the sale price per bulk back of sugar and 29.3 per cent for the retail packages typically found on grocery shelves, according to Callaghan.

Pre-COVID, the wholesale prices for both bagged and packaged brown sugar was around $135 and $142 per kg, respectively, while the retail price for sugar in grocery stores is about $246.40 per kg.

Multiple brands line the shelves, including Jamaica Gold, Worthy Park, Golden Grove, Eve and Grace.

With the increase in wholesale prices, bagged sugar would have climbed to about $147.42 per kg and packaged sugar to $150.52 per kg, while retail packages on grocery shelves would be about $261.67 per kg.

Up to 1994, the price of sugar was determined by SIA. That function was passed on to Jamaica Cane Products Sales Limited which was initially the exclusive marketing agent for SIA.

But with the privatisation of the sugar industry in the past decade, the marketing of sugar was decentralised in phases after 2009, and over time individual sugar producers secured their own marketing licences from SIA – a development that eventually led to the demise of JCPS.

However, under the provisions of the Sugar Industry Control Act, SIA is still empowered to make arrangements for the marketing of sugar and molasses for local consumption and for export. The statute also allows the SIA to appoint agents; regulate payments to such agents; and to review all existing policies in relation to the marketing of sugar and molasses.

In that regard, Callaghan has recommended that MICAF issue an order giving it the authority to bar any further increases in the price of sugar by its three marketing agents.

The SIA also wants any future increases above current levels to be subject to tripartite approval of the Sugar Prices Committee, the Sugar Industry Authority and MICAF prior to implementation.