The sugar industry, our largest, in recent years has faced some very difficult times as a result of the combination of several factors including inclement weather, unstable industrial relations, factory inefficiency, poor management and severe cuts in prices for sugar following the closure of the Sugar Protocol which had guaranteed high prices.
Despite all its difficulties the sugar industry has survived unlike its other counterparts in the Caribbean. In fact, it has been the only sugar industry, along with Belize, in the Caribbean to have survived the liberalised and free trade environment. In this regard, credit must be given for doing everything possible to ensure the industry’s survival and return to viability. And we are already seeing positive signs in the direction of returning to viability, although there is much room for improvement.
Despite inclement weather prematurely ending this year’s sugar crop, the Guyana Sugar Corporation (GuySuCo) was able to produce approximately 12,000 tonnes of sugar more than last year.
According to newly appointed Agriculture Minister Dr Leslie Ramsammy: “We have ended the crop, and it appears as if we will have a production level of about 12,000 tonnes greater than 2010.  GuySuCo will end up producing just over 237,000 tonnes for this year. This will be below their own target, but I want to commend the workers for their efforts to reach 240,000 tonnes.”
Dr. Ramsammy explained, it was intended that cane-grinding should continue, but the factories were unable to so do, since the rains had affected the harvesting of the crop.
So there has been a return to an upward climb in production which is necessary and encouraging, because the industry could capitalise on the increased demand and prices for sugar on the global market.
According to Michael McConnell, Erik Dohlman and Stephen Haley in their article: “World Sugar Price Volatility Intensified by Market and Policy Factors”, world sugar prices soared to a 29-year high of nearly 30 cents a pound in early 2010 before falling back to half that level by early summer. Still, they remain 50 percent higher than average over the past 20 years. Was this price spike a temporary oscillation caused by a supply shock or does it reflect a more permanent fundamental shift in global market dynamics?
The article adds: “Evaluation of economic and policy factors driving production and trade in key global sugar markets supports both perspectives: underlying dynamics related to Brazil’s exchange rates and ethanol’s role in energy markets are putting upward pressure on global prices. However, the volatility of price movements in the past year was mostly the result of supply shortfalls tied to changing economic incentives, weather disruptions, and policy factors in other countries.”
According to the World Bank, global food prices continue to rise. The World Bank’s food price index increased by 15% between October 2010 and January 2011 and is only 3% below its 2008 peak. The last six months have seen sharp increases in the global prices of wheat, maize, sugar and edible oils, with a relatively smaller increase in rice prices.
It is therefore clear that upping sugar production is not an option, but rather an imperative if the sugar industry is to be returned to its once glory days. However, if this is to be achieved there has to be proper management of the industry and a responsible attitude of workers.
No longer must there be an antagonistic atmosphere between management and the workers. Whenever there is a problem between workers and management it should be resolved amicably and expediently and not be allowed to drag on and become an escalating conflict as has happened in the past. On a positive note, it should be observed that ever since the current CEO of GUYSUCO assumed office there has been a dramatic reduction of industrial disputes and this is a healthy and optimistic sign that the industry is back on track.