CUBA: Sugarcane Harvest Falls Short

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, May 3 2006 (IPS) - The sugarcane harvest in Cuba, which as of Apr. 30 had yielded 1.1 million tons, has fallen short of expectations and will barely cover foreign commitments and domestic consumption needs, warn experts.

“Of this total, 700,000 tons will be used to supply the population of 11.2 million. The remaining 400,000 tons are destined for the Chinese market,” a researcher who preferred to remain anonymous told IPS.

The expert estimated that the final harvest would come in at fewer than 1.2 million tons, even if the harvest extends later into May. “This is typically a rainy month, and the combination of humidity and heat negatively affect the cane’s sucrose content,” he explained.

The official goal was to match last year’s production, estimated at 1.3 million by independent sources. Economy and Planning Minister José Luis Rodríguez did not include this information in his report to the National Assembly on the 2005 economic results.

The economist consulted by IPS noted that the current season, in which approximately 40 sugar mills are participating (30 fewer than in the previous harvest), got off to a shaky start due to a shortage of basic supplies needed to guarantee adequate industry performance. The situation improved somewhat following a meeting between President Fidel Castro and sugar industry leaders on Feb. 14 and the emergency supply of new agricultural machinery parts, fuel, fertiliser, herbicides and other resources.

“We are pleased with the efforts made by agricultural and industrial workers in the sugar trade – they have worked tirelessly to boost production,” said Castro Monday, during festivities to mark International Workers’ Day.

When announcing the results of the current harvest, up to the end of April, Castro said that labour efforts made since mid-February translated into an additional 200 million dollars in revenue for Cuba.

The expert who spoke to IPS estimated that Cuba may have to pay up to 80 million dollars for imported sugar, if required to satisfy domestic demand. “In the past, Havana has bought sugar from Brazil and Colombia,” said the source.

Four years ago, Cuba restructured its former flagship industry, and dismantled 70 of its 156 sugar mills, to bring its production capacities in line with international prices, which at that time were extremely low.

However, the world sugar market slowly rallied, in a process some experts attribute to structural market change, rather than circumstantial factors.

Raw sugar prices began to rise steadily in 2004, and since November 2005 have reached as high as 20 cents of a dollar per pound on several occasions.

Taking advantage of the boom, Havana expanded its sugarcane crop, although the measure will not yield results until the 2006-2007 harvest û if sector investment and resource allocation continue.

According to forecasts, “prices will remain high,” and if they drop, “minimums will hover between 15 and 16 cents” per pound, wrote Cuban professor Armando Nova in an article on the issue.

One of the factors that have driven up prices, said Nova, is growing world consumption û expected to reach an annual average of close to 3.5 million tons by 2011, while at the same time production is being limited by adverse climate conditions and other challenges.

Furthermore, the European Union (EU) sugar-market reform, approved last year, takes effect in July. It slashes production levels and subsidies to eliminate surpluses, and drops preferential conditions for cane growers in the ACP group (Africa, the Caribbean and the Pacific).

Many experts also attribute the high price of sugar to the boom in ethanol (fuel alcohol made from sugarcane or other organic material), which has become popular as an automobile fuel.

Nova pointed out that the steady depletion of finite petroleum sources and increased costs involved in locating and exploiting new deposits have made the search for new fuel and energy sources essential.

“Electric energy production through cogeneration technology that burns sugarcane waste products is becoming more and more viable; it is one of the most economic, self-sustaining, renewable, pollution-free options available,” he wrote.

Nova concluded that, together, these factors make it clear that increases in sugar prices are the result of structural change, not unpredictable, short-term conditions.

The Cuban government seems to be aware of these analyses, and would apparently be willing to accept foreign direct investment in sugar cultivation and processing – unprecedented in this industry since it was nationalised after the January 1959 revolution.

The Zerus company, a private corporation that operates under the auspices of the Sugar Ministry, oversees the development and control of business and investment projects in the sugar industry, playing an even stronger role since the reforms of 2002.