Sugar industry

THE plight of our sugar industry (FT 02/10) calls for a more pragmatic and innovative approach and a “think outside the box” solution. I am of the view that the current strategies and processes employed in the industry need a serious overhaul.

The industry needs to align itself to the changing current and future consumer demands, with the advent of artificial sweetners, beet and palm sugar and so on, as well as to the rapidly changing technological developments in the industry’s processes.

I am of the opinion, that we need to move away –– in a strategic and pragmatic manner –– from a total reliance on the production and export of bulk unrefined raw brown sugar, to a much more broader production and export base, with a focus for instance on sugar and cane byproducts. The production of rum and molasses is a start of one of many possibilities. There is a relative high risk inherent in continuing with the current strategy of total reliance on raw bulk exports.

Since the end of the preferential export price arrangement with the EU, we were lucky, that we were still able to have in place, export quota agreements with a small number of countries to enable the continued survival of the industry.

Otherwise, we would have had to export all our sugar to the very volatile and competitive open world market with its relatively lower world market price.

I do not think that given the current state of the industry, we would be able to survive in the open market.

Unfortunately, the risks faced by the industry today is much greater than any time in the previous past.

The revelations in the industry’s recent annual report of the escalation in accumulated losses, is an indication of the plight its in. The further revelations that there is currently “oversupply in the world market” which I believe is for raw sugar, should immediately trigger corrective measures in the industry. As this is likely to be the future trend for raw sugar demands by consumers, despite it being more healthy.

However, we should not remain complacent and we cannot continue on the current path. It is time to make some bold moves and change. Too much is at stake, considering how important this industry is to our economy and to the bulk of our population that depend on it directly and indirectly for a living. The world has moved along and so should we. Anyway, I understand that a study team from one of our bilateral partners will soon be engaged to review the industry. I do hope that they look beyond raw brown sugar bulk exports and recommend a much more broader production and export base, which would be more cost effective and which enables the industry to be buffered against a volatile world market.

Obviously, along with this, is the efficiency of the whole process from canegrowing, transportation to milling and production, its management and administration, as well as the infrastructure, human resources, and research and development, that make it all happen.

EDWARD BLAKELOCK

Admiral Circle, Pacific Harbour