Sugar production and prices stay put

Despite the fact that Cuba did not meet its sugar production goals in the so-called small harvest, the indicators confirm a more solid pace than in previous years.

This year Cuba aims to increase sugar production by more than a fifth.

The 2014-2015 harvest kicked off in Cuba with a more encouraging pace than in previous campaigns. The first reports recognise a better pace from November to December, the so-called small harvest, at a time when sugar prices on the international market are showing an unexpected resistance in the face of the strong drop in oil prices.

The Communication Office of the Azcuba business group recently reported good results in that industry’s standard efficiency indicators, the potential norm, the industrial yield and the amount of sugar produced. The firm’s official communicator, Liobel Pérez, commented that the balance is similar to what had been stipulated and qualitatively superior to what was registered in the same period a year before.

Successive reports point out advances in the principal efficiency indicator, the industrial yield index: tons of sugar per each 100 tons of sugar ground in the sugar mills; it therefore surpasses what had been planned as what was registered a year before. Those results “have cushioned the non-fulfilment of the sugar plan,” Azcuba observed in its most recent report.

According to the report of last January 23 in the firm’s website, until then the industry was producing 95.7 per cent of the planned sugar with just 88 per cent of the previewed raw material.

Out of the 51 sugar mills that have to join the present harvest, 46 were grinding sugar at the start of January, three more have started up this month and another two would join in February, including one, the Roberto Ramírez, which had to stop grinding as a result of  a fire.

Ciego de Avila, Cienfuegos and Sancti Spíritus are the provinces with the best pace, while Mayabeque, Las Tunas and Matanzas have the greatest difficulties, according to the daily Granma.

In general, the start of the 2014-2015 harvest is key for the Azcuba group, which aims to increase up to 23 per cent the previous harvest’s sugar production, as well as the amounts of alcohol, animal feed and other derivatives.

For several years the Cuban agribusiness has registered consecutive growths in production volumes, but it has also always remained below the strong goals it has set.

Though Cuban sugar producers and exporters have not made public comments, they are keeping a close eye on the foreign price tendency at a time when the international markets are threatened by the collapse of oil prices.

Sugar prices, however, have shown resistance. In the last two weeks of January they stood at between 15 and 16 cents of a dollar per pound in New York. Among the factors that have propped up these prices are the reports from Brazil, the major sugarcane producer in the world, about reductions in the harvests of its principal sugar producing states, as well as the decision by that country’s government to re-establish a tax on gasoline and diesel to incentivise the use of ethanol. The Unica sugar industry group said that the measure will encourage Brazilian manufacturers to produce more ethanol than sugarcane-based sugar.

Therefore the measure distances the threat of an increase in sugar production and of the supply in the markets and protects the international prices at their current levels. (2015)

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