Mauritius eyes regional markets

He has a good reputation. But despite the privileged market in Mauritius, Mauritian sugar is now turning to regional markets due to the situation in Europe. This product, which has been in great demand in the Old Continent for the past two years, has lost its appeal in 2024 due to falling prices and the fact that European production has increased by 1.5 million tons compared to the previous year. “Madagascar is the growing market for sugar this year””, affirms Devesh Dukhira. Chief Executive Officer (CEO) You Mauritius Sugar Group (MSS). The fall in sugar prices in the new season in the European market is due to the impact of Europe’s financial support for Ukraine, which allows duty-free imports of Ukrainian products, including sugar.

In 2023, Ukraine’s total consumption will be 16 million tons, of which 500,000 tons will be exported to Europe at very low prices. “Two years ago there was a shortage of sugar, but today the situation is different. Sugar is cheaper in Ukraine, while there is a surplus in Europe, which reduces prices there.”, explains Devesh Dukhira. “Regional markets become more interesting if we have to compare different sales options”the CEO stressed. Mauritius also benefits from the agreement with COMESA, which facilitates access to regional markets.

Don’t screw it up

Faced with the growing demand for Mauritian sugar, including specialty sugars, in the region, he believes that producers have benefited from better visibility since 2021 due to improved sugar prices per tonne and adjustment in bagasse prices to Rs 3,300 per tonne. “The productivity of old sugarcane was declining, but since 2021 we have started replanting it””, argued Devesh Dukhira. “This is where the Sugarcane Replanting Scheme and Sugarcane Revolving Fund Scheme are welcome to help smallholder growers increase their yields.” Sugar production in 2023 is 238,854 tonnes, up 2.6% from 232,000 tonnes in 2022, thanks to replanted land.

But replanting 9,900 acres in three years is not enough. ‘We have to go further’He estimates that only 35,000 acres of land are currently used to grow sugarcane. “It is imperative to ensure maximum production in the region and reclaim abandoned land, estimated at 10,000 hectares. With the right policies, the problem can be solved. A return to production of 300,000 tonnes is desirable. Mauritian sugar remains popular and it would be a shame to miss these opportunities.”

Record

The accounts for the 2023 harvest finalised on Friday showed that sugar prices hit a new high of Rs 30,951 per tonne ex-Syndicat des Sucres. This amount is a 21% increase compared to the 2022 price of Rs 25,554 per tonne. “These are the highest prices we’ve ever seen””, affirmed the CEO, comparing the prices of 2022 with 2021. He explained that this record was caused by special circumstances, characterized by high world prices, shortages on the European market, and the impact of the war in Ukraine, which led to huge production costs. “These three factors have led to a price increase of nearly 100% in Europe and our price in 2022 is Rs 25,554”he noted. Further price increases in the global market have caused sugar prices in Mauritius to be sold 10% higher than in 2022.

He added that this situation continued at the start of the 2023 season in Mauritius. The decline in transportation costs and the weakness of the Mauritian rupee (which has risen by 5% against the US dollar) have also led to an increase in the price of sugar per ton. In 2022, the price of sugar per ton has increased by a significant 52% from Rs 16,765 in 2021 to Rs 25,554, but Devesh Dukhira predicts that favorable global conditions will not be present in 2022 and 2023. Final.

Furthermore, Mauritian sugar continues to enjoy strong international demand, as does specialty sugar. Mauritian specialty sugar caters to niche markets and is exported to more than 60 countries. Demand remains high, mainly because few countries produce it.

Advertising and reality

Despite measures to ensure sustainable development of the sugar industry, Salil Roy, president of the Sugar Industry Association Planters Reform Associationfearing that small plantation owners would abandon their land due to high production costs and lack of labour. Two measures announced in the 2024-25 Budget, namely Sugarcane replanting program and Sugarcane Revolving Fund Schemedo they really benefit a large number of small plantation owners? “Many of them have abandoned their fields. Despite the measures announced, they cannot find the labour they need. Many have left their sugarcane in the fields due to a lack of trucks to the mills.” For Salil Roy, despite these announcements, “The reality is quite different”.

He added that this situation does not encourage farmers to continue growing sugarcane. According to him, if most small planters renew their fields and take advantage of the advantages provided to them, they will be satisfied with the price of Rs 30,591 per tonne of sugar, which is the cost of the 2023 harvest. As the government announced in the last budget, the guarantee of Rs 30,000 per tonne of sugar for the 2024 harvest is only for sugar and not for “All inclusive”. Hence, he said, the labour problem can be solved as young people can be interested in it. He added that the plantations not only produce sugar but also bagasse, ethanol and special sugar. “They have contributed a lot to the industry, but they must be monitored so that future generations do not abandon them.”

For Kreepalloo Sunghoon, Secretary Small Planters Associationthe fact that certain decisions are included in the budget framework does not guarantee their effective implementation or their ability to respond to the real problems of small growers. “There is a world of difference between the advice given by technicians or experts from the Ministry of Agro-Industry and the actual needs of small growers. What solution could go a long way to address the biggest problems they face? The answer lies in the creation of a land bank. This proposal has been before the authorities for more than a decade but has not received the attention it deserves.”

What is this about? “Establish a structure capable of constituting an inventory of all the lands of small planters that, for one reason or another, cannot be used for the cultivation of sugar cane. By entrusting their lands to this structure, the small planters will accept that their properties will be developed by those who are able to continue to cultivate sugar cane or to transform the land to accommodate agricultural diversification projects. This proposal for landowners who previously cultivated sugar cane should be accompanied by a guarantee of regular payment of rent for the lands entrusted to the institution of the Land Bank.

For Kreepalloo Sunghoon, the items are as follows Rattan Replanting Program and Sugarcane Revolving Fund Scheme It also perfectly illustrates the gap that exists between the experts at the Ministry of Agriculture and Industry and the day-to-day reality of small sugarcane growers. “These projects only scratch the surface of the problems they face. My candor and my honesty may cost me dearly but I raise the real issues which mean that for many small growers the accumulation of these difficulties gives the impression that their future in the sugarcane growing sector is greatly compromised.”

Another major issue that causes pessimism among many small planters is the way in which their contribution to the sector’s activities is paid. “The current system rewards small plantations according to sugar production, causing economic losses to all smallholders. This damage will only disappear if payments are made according to the weight of sugarcane stalks delivered to sugar producers at harvest. This system will exclude small plantations from activities related to the development of the potential of sugarcane byproducts, such as the pharmaceutical industry or the production of alcoholic beverages, in which they have no interest.”

Medine and Agriterra implement innovative technology

The 2024 sugarcane harvest campaign has begun with the adoption of new technologies aimed at optimizing planting and crop yields. Two players in the sugar industry, Medine and Agriterra, are innovating to meet the challenges of this season. On June 26, Medine started its campaign with the goal of harvesting 200,000 tons of sugarcane by December. The company plans to produce 21,500 tons of sugar with an expected extraction rate of 10.75%. During this campaign, Medine implemented several technological innovations. The company has replanted more than 300 hectares of sugarcane and invested in two new modern planters as well as precision irrigation systems. These systems include remote-controlled pivots designed to optimize water use. The season was affected by different climatic conditions: abundant rainfall at the beginning of the season, followed by floods in January and April and heavy rains in February and March. Patrick Lagesse, general manager of the Medine Agricultural Center, spoke about these challenges: “We are aware of the challenges associated with climate change, but our commitment to innovation and sustainable development enables us to overcome them. Our investment in technology and equipment reflects our confidence in the future of agriculture in Mauritius.” In preparation for the harvest, Mamet also organized a workplace safety awareness session in partnership with law enforcement and emergency services. Agriterra, for its part, began harvesting on July 8. The company has refocused its strategy around the collaboration between its two divisions: Terragri, which specializes in sustainable agricultural practices, and Terra Milling, known for producing specialty sugars. Sebastien Mamet, general manager of Agriterra, explained this repositioning: “This move marks a turning point in our sugar industry. Our goal is to create an integrated and innovative approach with a focus on precision farming and high-quality sugar production.” Agriterra currently manages 6,000 hectares of sugarcane with a production capacity of 336 tons of sugarcane per hour. The annual production of specialty sugar is 72,000 tons. It sends 5,871 tons of straw to Terragen, contributing to the production of green energy.

Bagasse: Growers demand 100% payment

The payment for bagasse has just been made. But for Salil Roy, the payment was «Sugar Terms»That is, for example, for ten tons of sugar, if bagasse is sold at Rs 3,000, we multiply ten tons of sugar by Rs 3,000 to get the total price. This is disadvantageous to the plantation owners who want to get paid. «Bacca glossary». because «Sugar Terms» This means that growers are not paid 100% for the bagasse they produce.