The second payment of the Northern Region Caneyros sets a new record

Orange Walker, Wednesday, August 21, 2024

One month after the 2023-2024 sugar crop season ended in the north on July 21, Belize Sugar Industries, Inc. (BSI) notified farmers that they would receive “a record second cane payment reflecting a record second cane price estimated at $75.20, approximately $5 above last year’s record price.” In a press release today, BSI Finance Director Shawn Chavarria was pleased to announce that the payment set a new record for the 2022-2023 crop season – a difference of $5.00. Prior to this, the previous record was set in 2015.

Chavarria attributed the record prices to “some investments we made to increase the value of the sugar we produce and to reduce logistics costs”. However, global sugar prices have also risen. Chavarria called it a “good day for the industry” and looking forward to the third payment due in November, he said: “We believe there is potential for further increases.”

On the downside, the harvest was affected by lower than expected sugarcane production this season. A total of 1,027,462 tons of sugarcane were shipped to the mills, producing 102,718 tons of sugar. Although this year’s sugarcane production increased by about 40,000 tons compared to last year, the sugar production was lower than last year. “If we maintained the same quality, we could have obtained at least 3 to 4 thousand tons of sugar from the cane. This would definitely result in more income for the farmers and better prices for the cane,” explained Chavarria.

Turning to the issue of unprocessed stranded cane, Chavarria reported that the Sugar Cane Production Commission (SCPC) is conducting an assessment to determine the actual number; however, it is believed that the stranded cane is between 60,000 and 100,000 tons. This is despite the extension of the crop planting period by two to four weeks. Among the factors that have led to the stranded cane, Chavarria placed the blame on the impasse with the Belize Sugar Cane Growers Association (BSCFA), which has delayed the start of the crop planting by about 12 to 14 days. He added that although the BSI wanted to start planting on December 14, the Sugar Industry Control Board (SICB) failed to announce that date and instead set December 28, 2023 as the start date. Thirdly, Chavarria noted that heavy rains arrived earlier than usual at the end of the crop season. This led to disruptions in deliveries and elevated mud levels that began to cause production issues for mills. To avoid possible challenges in the future, Chavarria urged industry players to start planting early.

As to whether the company should compensate farmers for the cane being held up, as it has done elsewhere, Chavarria said cane being held up happens from time to time and is therefore “not uncommon”. He added that they would have been able to mill the cane that is now sitting in the fields if there had not been delays at the start of the crop. He then said: “So from our perspective, we do not feel that we are responsible for any of the cane being held up because we were ready to start planting cane earlier last year but were stopped.” Chavarria said BSI had also suffered losses as around 10,000 tonnes of cane were left in BSI’s fields; while it is expected that they should be delivered in December 2024, the quality would not be as good as if they had milled it in June.

The BSI director hopes the 2024-2025 sugar crop season will get off to a smoother start because of the interim agreement signed by BSI and BSCFA in January this year for a period of two years. He said if the two sides fail to reach an agreement by then, the 2025-2026 crop will face greater challenges.

In terms of production, the BSI reported in its release that Belize has the lowest sugarcane yield per acre compared to Guatemala (42 tons), Nicaragua (41 tons), Honduras (37 tons), El Salvador (35 tons), Costa Rica (28 tons), and Mexico (28 tons). In fact, the BSI noted that even Santander Sugar Group’s 29 tons of production is higher than Belize’s northern sugar production of 17 tons per acre, according to data from the Central American Sugar Association. That’s a 70 percent gap. Chavarria said stakeholders in the north are starting to pay more attention to this reality and are trying to turn things around. He noted that several projects are coming online, including one funded by the Green Climate Fund, that will increase yields by planting superior sugarcane varieties that are more resilient to the climate. He commented, “I think it took a long time for this message to resonate with stakeholders; but I think it was finally recognized, especially considering there was another sugar mill in Belize…their farms were very productive. They had very high yields. I think it showed everybody the potential to improve the farm sector.”

BSI has enough sugar to supply local market until 2025

Now that sugar production for this season’s crop in the north has concluded, Chavarria has been asked if there is enough sugar for our local consumption until the next crop in December. Chavarria confirmed that they do exercise a level of due diligence, ensuring they monitor sales and carefully vet any new customers “to ensure it is for legitimate business purposes”. The same is true for those who want to increase their purchases, he said.

Chavarria stated: “We certainly have enough stocks on hand until the end of December and January 2025, but we have to remain vigilant…” Chavarria also stated that they will continue to provide any information requested by the supply control department regarding the buyers of the sugar produced by BSI. However, he reiterated that they cannot control the porous borders and cannot prevent any BSI sugar from crossing our borders.