CTA
Small fontsize
Medium fontsize
Big fontsize
English |
Switch to English
Français
Switch to French
Filter by Agriculture topics
Commodities
Regions
Publication Type
Filter by date

Mauritius completes move to refined sugar exports, other countries face variable prospects

09 August 2011

According to press reports, the Mauritius Sugar Syndicate (MSS) estimates that ‘income from sugar exports will rise 4.2 percent this year as the industry shifts to producing refined and specialty sugars.’ This needs to be seen in the context of a 7.1% decrease in the volume of sugar produced in Mauritius. According to MSS CEO Jean-Noel Humbert, ‘for the first time since the Dutch introduced sugar in 1650, Mauritius will be exclusively producing value-added sugars.’

Mauritian refined sugar is marketed in the EU under a six-year contract (up to 2015) with Suedzucker AG of Germany. Exports now consist of 70% refined white sugar (known as EEC Grade 2) and 30% of 15 varieties of speciality sugars. In 2010, Mauritius produced 256,267 tonnes of refined white sugar and 110,000 tonnes of speciality sugars, as well as 81,450 tonnes of raw sugar.

According to Jean-Noel Humbert, ‘it isn’t viable to export raw sugar anymore’, following the reform-driven price reductions in the EU.

It has also been reported in the press that the injection of $100 million in government funding to improve the performance of the Fijian sugar industry ‘did not work’. According to FSC’s chief executive Abdul Khan, if the industry’s performance was to improve, then the yield of high-quality cane produced in a cost-effective fashion would need to increase, while ways would need to be found to ‘generate revenue from multiple products and buyers’. Abdul Khan called for improvements in FSC’s management system. However there was optimism that sugar production in Fiji could rise to 190,000 tonnes this year, after a disappointing total of 130,000 tonnes last season. This however ‘is dependent on the efficiency of the mills’.

In the Caribbean, press reports suggest that sugar production in Jamaica is set to increase by 13.5%, although the performance of different estates varies greatly, with some exceeding production expectations and others failing to fulfil their contribution obligations ‘under the pre-financing arrangement to British refiner Tate & Lyle’. This in part arises from the refurbishment programmes in progress, including the expected final full takeover of the Monymusk, Frome and Bernard Lodge Estates by the Chinese company Complant International Sugar Industry.

Editorial comment

The transition of Mauritius to production of refined and speciality sugars raises important issues for high-cost island producers of sugar across the ACP. If Mauritius, with a well-functioning sugar industry with a long tradition of efficiently supplying high-quality raw sugar to the EU market, no longer believes that the export of raw sugar to the EU market is commercially viable, what does this mean for the commercial viability of future raw sugar sales from other high-cost island producers elsewhere in the ACP?

Clearly in countries as diverse as Jamaica and Fiji the limited future commercial attractiveness of the EU raw sugar market is recognised. However there are significant differences. Whereas in Mauritius EU restructuring support and EIB loan financing was used to ‘pump-prime’ a market-led restructuring process, in Jamaica this is largely being left to private investors (including foreign private investors), with EU support being used to help carry the burden of social adjustment associated with the privatisation and restructuring process. Critical to the market adjustment process in Jamaica will be the pending decision on the establishment of a refinery at the Frome Estate (see Agritrade article, ‘ Ambitious plans for Jamaican sugar sector’, June 2011). In Fiji, by contrast, press reports consistently highlight the lack of financing for comprehensive sugar-sector restructuring and the poor utilisation of the funds available. This leaves the Fijian sugar sector locked into continuing to export raw sugar to the EU market (see Agritrade article, ‘ Tate & Lyle seeking long-term sugar-supply arrangement’, June 2011), despite aspirations to diversify both their product range and the markets served.

Comment

Terms and conditions