Press reports in January 2013 indicated that the Barbados Ministry of Agriculture was opening discussions with the Japanese Marubeni Corporation regarding “the possibility of funding the restructuring of the sugar cane industry”, converting “the existing sugar sector into a sugar cane and renewable energy industry”. According to the Barbados Cane Industry Corporation (BCIC), “this new thrust will result in the processing of over 330,000 tonnes of sugar cane to produce 15,000 tonnes of raw sugar, 12,000 tonnes of refined sugar and 24,000 tonnes of molasses” and “170,000 megawatt hours (MWh) of electricity”. The new facility is scheduled to start working in January 2016, although the project is at the final design stage, and still defining capital requirements.
BCIC and the Ministry of Agriculture are seeking funding in two phases:
- Field-level improvements to secure the basic agricultural requirements of the new facility, largely consisting in financing farming improvements to expand production;
- Refurbishment and extension of a single multi-purpose facility.
In Guyana, the government is reported to be particularly concerned about changing weather patterns that have shortened the harvest season, contributing to a consistent underachievement of sugar production targets in recent years (see table). As in Barbados, the government considers that a reorganisation of field-level operations is required to improve supplies of cane to the mill.
Sugar production in Guyana: Targets, revised targets and actual output (tons)
Note: Output 2012 – estimate
Source: collated from Demerarawaves.com (see below)
In Jamaica, meanwhile, a number of initiatives in the sector are taking place. The Chinese-owned Pan Caribbean Sugar Company (PCSC) has reported its first annual operating profit, for the year to 31 July 2012, following losses in 2011. This followed reports of major cost reductions. With production of 60,600 tonnes, PCSC is to be allowed to export some 27,600 tonnes of sugar (a government quota “limits the sale of raw sugar to the domestic market”).
For the 2012/13 season, PCSC has already “signed a contract with France-based Sucres et Denrees [Sucden]… to supply approximately 40,000 tonnes of raw sugar”. Sucden “is one of the world's leading sugar trading houses, controlling some 15 percent of the world sugar market”, and responsible for annual trade of “over five million tons of both raw and white refined sugar”.
It is anticipated in the press that, following the completion of further technical modifications and upgrades, PCSC should be able to produce 154,000 tonnes of sugar a year, becoming the “dominant sugar manufacturer in Jamaica”.
Tate & Lyle Sugars is continuing its efforts to secure fair-trade certified sugar from Jamaica, with a growing number of farmers’ groups reported to have been supported to attain Fairtrade certification.
Meanwhile, the Jamaican government is supporting large-scale initiatives, focused on planting and replanting, with concessional loans, to boost sugar cane production by independent farmers to 1.4 million tonnes. The maintenance of high sugar cane prices as an incentive to farmers is seen as critical.
BCIC’s efforts to link up with Marubeni Corporation are consistent with the Barbadian government’s strategy to “further integrate environmental considerations into this country’s social and economic fabric”. While Marubeni Corporation has experience in many forms of renewable energy, it is relatively new to biomass-based energy projects (its first such project was initiated in Singapore in September 2011). Substantial financial investment for the proposed multi-purpose facility still needs to be mobilised, and the initial plans from 2009 have already faced delays. Across the Caribbean, sugar-cane based bio-energy production is limited, and only Belize has a co-generation facility in place (opened in December 2009).
The experience in Guyana, which has seen a steady downward revision of production targets since 2009, suggests that the priority accorded in Barbados to improving field-level efficiency is appropriate, since the viability of cogeneration built on bagasse is inextricably linked to productivity improvements in sugar cane production. The progress apparently made in Jamaica by PCSC highlights the scope that exists for cost reduction and efficiency improvements. The cautionary note from the Jamaican All-Island Cane Farmers’ Association, however, highlights the scale of the challenges faced in improving cane yields.
While Tate & Lyle Sugars’ appetite for Fairtrade-certified sugar suggests that opportunities exist for Caribbean smallholder sugar cane producers to secure price premiums, the emerging supply relations between PCSC and Sucden (one of Tate & Lyle Sugars’ principal European competitors) suggest that some level of strategic thinking in the Caribbean is required regarding the marketing challenges faced in the context of new corporate realities.