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Dec 7, 2015

2015/2016 Sugar Crop Kicks Off in the North

After two successive crop season delays underscored by tension and strife in the industry, the 2015/2016 crop season started right on schedule. But even with that start there is concern since world market prices have dictated a very low first payment for farmers this crop. And if that’s not bad enough there is worse on the horizon since preferential treatment comes to an end very soon. Against that backdrop there is a sense of urgency from all stakeholders because all must come to the table to chart a path forward. Mike Rudon went north today for the start of crop and for a look at storm clouds looming.

 

Mike Rudon, Reporting

The 2015 sugar cane crop season opened this morning, with the Progressive Sugar Cane Producers Association delivering first. It was a slow start which delayed the commencement of milling for hours, but in this volatile industry just starting on time is a good thing.

 

Gabriel Martinez

Gabriel Martinez, Chairman, Sugar Industry Control Board

“I guess over the days that have passed we have all been in discussions, debates, fine-tuning everything so that we can start this season on time. I guess we are all so happy to start today because the idea is to start on time so that we can finish on time with the hope that, weather permitting, the factory can mill for some days more and so farmers can have that relief of being able to deliver some more of their product.”

 

Part of the crop-season opening this morning included the highlighting of investments during off-season, including the installation of a new forty-ton truck dumper which will greatly enhance the delivery of cane.

 

Sean Chavarria

Sean Chavarria, Financial Controller, B.S.I.

“We expect to see a lot of benefits from it—both from industry standpoint, safety as well. As you can see from some of the footage, the operators and drivers of those vehicles when they are unloading cane, using the cranes, they have to get on top of the trucks. They have to get on top of their trucks, they have to hook them on and it poses a safety risk as well. But with the truck dumpers and this new one, you go on to the ramp, you hook your truck, you signal that it is ready and the operator in the cane yard cabin offloads it. Once the carriers is free, it takes less than a minute and the truck goes away.”

 

The truck dumper represents an investment of more than a million dollars, and there have been similar investments over the past few years. Now, instead of waiting days to deliver cane there is a turnaround time of less than an hour. With all that, B.S.I. can still only mill a maximum of one point three million tons per season, while the latest survey estimates one point seven tons in the fields.

 

Sean Chavarria

“That plan is to get all the stakeholders together to agree what the future lies for Belize and what each stakeholder will do. So from our end, yes, it is our vision to expand the mill, but we need certain things in place. We need commitment from growers to improve on harvesting and delivering, trying to cut costs. As you know, the market is changing and with the decline in prices, we have to look at costs. We can’t say we will expand if we aren’t able to compete at a lower price. So that is a priority for us; cause if we expand to one point eight and you find that farmers cannot cope with lower prices, then you’ll have a mill that is under-utilized because production will start to decline. So that plan is very important. We need to have that plan in place to chart the way forward in how we can reduce our harvesting cost, our delivery cost [and] improve quality because it is a very big commitment on behalf of the company. It is over two hundred million Belize dollars to expand to one point eight million.”

 

That’s one of the biggest challenges facing the industry as 2017 approaches and preferential prices depart. The bottom line is that farmers will need to learn how to process more cane on less acreage and at a much lower production cost.

 

Sean Chavarria

“If you have the cane but you cannot produce and deliver it at a lower cost then at some point you will find yourself struggle. The prices of getting seventy dollars are no more and you are not able to compete at that level. So the cost is a very important element of it. We need to find a way of how we can reduce production cost to be able to compete.”

 

Gabriel Martinez

“It is a concern and I think I can say that it’s about the biggest concern in the industry. As rightly mentioned, the farmers have done their part. They have planted, they have taken advice and they have done what they were told to do—to plant more cane—and now we are faced with the issue of mill capacity. It is a big concern and I must say that the discussions that we have been having, sourly, are gearing to include the strategic development plan which has involvement of the government the sugar cane farming associations and the miller so that we can move on from here. It is indeed a big challenge and I must say that at this point, I don’t think I can offer any tangible solution as to how we will deal with this.”

 

That’s not exactly a shining beacon of hope and faith right there, but it is the reality, as painful as it may be to swallow. And as painful as it is, the fact of lower prices on the horizon should come as no surprise.

 

Jose Novelo

Jose Novelo, Chairman, Sugar Cane Production Committee

“The fact of the matter is that we all knew prices were going down; stakeholders were aware that it was going down. When we first announced it, what happened is that the prices in the EU did go down, but the world prices for sugar went up so the prices to a large extent even increased rather than decreased. But this has been on the table quite a while, in fact, three years ago we alerted the farmers once more that this could happen. And all the while we had been working at how we develop the competitiveness of this industry—both at the milling, in production and even the regulatory framework to see what we can do to assist with the competitiveness of this industry.”

 

According to Novelo, there is no choice in the matter because the viability of the industry is at stake. In other words, the strategic development plan must be put in stark focus sooner, rather than later.  Mike Rudon for News Five.

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Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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1 Response for “2015/2016 Sugar Crop Kicks Off in the North”

  1. Ricky Malthus says:

    Caneros must plan , develop , and implement their own horizontal and vertical cane industry to prevent not only BSI/ASR but any other monopolies allowed by government, to take away the management of their businesses. Look how you are scrambling because BSI/ASR control your every move. I am ashamed for you because you have not learned how to become and stay independent business-wise and other-wise. Not until you are pushed off your land as being done now although in a creeping fashion are you going to realize the infinite and fatal danger you are in.

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