GuySuCo reports fall in world market price for sugar

… GAWU says projection inaccurate

The world market price for sugar has dropped significantly, with a range of US$250 to $275 per tonne which is in the vicinity of $12.5 cents per pound, the Guyana Sugar Corporation (GuySuCo) has said.

However the Guyana Agricultural and General Workers Union (GAWU) has

debunked those claims saying the figures are inaccurate and does not represent a true picture of what prices on the world market are.

GuySuCo on Wednesday claimed that as of June 28, 2017, the prices per pound of sugar were US$12.66. But President of GAWU Komal Chand told Guyana Times that international price is US$12.77, which if calculated by tonnage would result in a greater income.

GuySuCo stated that it supplies annually 65,000 tonnes of bagged and packaged sugar to Caribbean and local markets. Another 12,000 tonnes of raw sugar is supplied to the North American market while the remainder which is also raw sugar, is sold on the European market. The supply to Europe for the second crop 2017 will total some 70,000 tonnes.

The company also claimed that the current forecast is that there will be a surplus of sugar on the world market for the marketing year 2017/2018. In addition, from October 1, 2017, the European Union (EU) market will also see some radical changes since it is anticipated that significant additional amounts of beet sugar will be available for sale and this will compete directly with cane sugar.

GuySuCo said this may result in reduced sugar prices in Europe. Due to the competition with beet producers, the price paid by the refiners for raw cane sugar (as supplied by GuySuCo) will be more in line with the world market price, which currently is trading at US$275 per tonne and the forecast is that it will not increase significantly in the near future. The price at the commencement of the year was US$396 per tonne.

However, Chand told Guyana Times that based on the international market prices and reports from Czarnikow Group Limited, a company that provides sugar market services to sugar producers, consumers, and processors in the United Kingdom and internationally, this may not be true.

The GAWU head said the company is responsible for analysing different sugar production areas in the world and they come up with projections. “They pointed out that the end of the sugar year which is in September; the production will be 177.8 tonnes which is an increase by 4.9 million tonnes,” he said.

Consumption, on the other hand, will be 187.1 million tonnes and stocks which are kept at a certain level so as to deal with situations that may arise from natural disasters has been dwindling.

“As of September this year, that stock is forecasted to be 30.8 million tonnes and it was 38 million tonnes last year. These numbers are telling you that the sugar prices will go up. So, where GuySuCo get this projection from that they will be there isn’t when you take into account the production, consumption and stock,” he asserted.

However, GuySuCo maintained that the anticipated lower prices for the sugar sold will not assist the Corporation’s fragile financial position and poor liquidity will continue to pose a serious challenge in the upcoming second crop.

Former President Donald Ramotar also gave his opinion on the matter, stating that fluctuating prices will occur but this does not have the potential to devastate the industry, especially if GuySuCo continues to work towards expanding its value added production.