Karl James, chairman of the Sugar Association of the Caribbean and general manager of Jamaica Cane Product Sales. - File

Caribbean sugar factories have produced and exported less sugar so far this crop year than the prior season, a portion of which is due to Trinidad and Tobago's total exit from the market.

The Sugar Association of the Caribbean (SAC) said in its May report on production figures that operations began slowing down ahead of the close of the current crop.

The season should wrap up by the end of June, but could extend into July, and regional factories would have to grind another 102,000 tonnes to meet performance targets of 600,000 tonnes.

The four producing countries remaining in the SAC group have churned out 497,721 tonnes of sugar between July 2007 and May 2008, an eleven per cent drop in volumes from 558,792 tonnes, year on year, while exports were off by 12 per cent.

Trinidad in the May 2006-July 2007 period contributed 25,252 tonnes of sugar to Caribbean volumes, but its absence from the market this crop season only accounts for 41 per cent of the decline in production, suggesting that the other players had lower crop yields.

Persistent rain

"As has been the case for some time, persistent rain has adversely affected production of sugar in Guyana, Belize and Jamaica, but we are hoping that it will be helpful to growing cane for the next crop, says Karl James, chairman of the Sugar Association of the Caribbean in a release on crop performance.

"The industry is also facing a very challenging year with Trinidad not producing this year, so at the present rate of production, and given the report on the adverse weather conditions, the final out turn for this crop could be much less than originally forecasted."

Jamaica records biggest drop

Indeed, SAC figures indicate that the remaining four SAC countries - Guyana, Jamaica, Belize and Barbados - all produced less sugar this season, with Jamaica having the biggest drop in volumes of about 21,000 tonnes, down to 126,650 for the crop year to date. Belize's production was down by almost 10,000 tonnes to 73,341 tonnes; Barbados was off by more than 2,000 tonnes, and Guyana by over 2,800.

The SAC countries sold 391,519 tonnes of sugar to Europe and other export markets to date this season, compared to 444,018 tonnes in the similar period of the 2006/07 crop year, with Jamaica and Trinidad largely accounting for the dampened external sales.

Exports to Europe - which accounts for just under 90 per cent of the Caribbean sugar market - amounted to 349,949 tonnes for the crop year to May, earning approximately €496.8 per tonne.

Earnings are booked in US dollars, and so, alongside the preferential price, the countries benefit from foreign exchange conversion gains as the dollar slides against the euro. One euro is now the equivalent of US$1.59.

"The weakness of the dollar against the euro has adequately compensated for the price reduction," said the association, referring to the latest of the phased price cuts in protocol sugar being implemented by the EU.

The first was a 36 per cent cut in 2006, while another 5.1 per cent reduction took effect July 1, according to the SAC, which pushes the price down to €471.46.

Last year, Jamaica shipped 109,350 tonnes of the commodity overseas, but this season its exportvolumes are down to 99,000 tonnes, while Trinidad's is down to 843 tonnes sold only to Caricom, compared to the 22,615 tonnes the twin-island republic sold regionally and externally.

Jamaica's sugar industry is also to undergo a transformation that will see less reliance on the business of raw sugar, and consequently reduced exports, and more reliance on ethanol and other value-added products under Infinity BioEnergy/NewCo, the Brazilian company that has acquired 75 per cent control of state owned sugar assets.

business@gleanerjm.com