The United Kingdom-based Tate and Lyle Sugars- one of Guyana’s major sugar buyers- appears more keen on offering technical assistance to the cash-strapped Guyana Sugar Corporation (GuySuco) rather than investing it.
“They advised that the EU will be dominated by beet and cane sugar will have to compete with beet. Even in countries that are major producers of cane sugar, some factories have been closing.
They cited countries like India which is subsidizing sugar production. Given these circumstances, they deemed the sugar market very complicated with too many variables to attempt predicting sugar prices. They emphasized that the cost of production must be brought down to be competitive. Tate and Lyle officials indicated their willingness to provide technical advice to GuySuCo,” said the Ministry of Agriculture.
The Ministry of Agriculture said a Commission of Inquiry currently probing the current state and future of the industry was told by top officials of Tate and Lyle that the price of the sweetener was expected to plummet even further when the cap on beet sugar is deregulated.
Deregulation is expected to begin in 2017.
The team noted that with falling world prices, many sugar industries across the world have been closing.
Following is the full text of a statement issued about the meeting between top executives of Tate and Lyle Sugars and the Commission.
The Government of Guyana appointed Commission of Inquiry (COI) recently met with Tate and Lyle Sugars, one of the main buyers of GuySuCo’s sugar in an effort to gather information. The commission has been meeting with key stakeholders in the sector to forge the way ahead for the sugar industry.
The commission met with Tate and Lyle’s Mr. Allan Wood, Global Head of Commodity Trading, Mr. Duncan Tate, Vice President, Trading and Mr. Mac McLachlan, Vice President, International Relations.
Issues raised by the Chairman, COI, Mr. Vibert Parvatan included; What are some of the factors which would impact on sugar prices over the next three (3) years; Given the current world market price at US11.3 cents per pound and the current EU price for GuySuCo in the region of US15 cents, what is the probability of the levelling off of prices and what factors would influence such a move; How did Tate and Lyle view its relationship with GuySuCo and how was this relationship seen in the future?; Whether the company would consider investing in the sugar industry?; Given the challenges facing GuySuCo’s sugar, what can Tate and Lyle do to assist GuySuCo?
The Tate and Lyle officials reflected on their long productive association with Guyana and stated their continued interest in buying Guyana sugar. However, recent developments in Europe have made the sugar market very volatile and that the primary consideration is market price. With the removal of preferential prices which ACP countries like Guyana enjoyed, the developing situation dictates that producers have to be more efficient and that demands disciplined management. They noted that the price situation will become even more complex for Guyana when the cap on beet sugar production is deregulated.
They advised that the EU will be dominated by beet and cane sugar will have to compete with beet. Even in countries that are major producers of cane sugar, some factories have been closing.
They cited countries like India which is subsidizing sugar production. Given these circumstances, they deemed the sugar market very complicated with too many variables to attempt predicting sugar prices. They emphasized that the cost of production must be brought down to be competitive. Tate and Lyle officials indicated their willingness to provide technical advice to GuySuCo.
All of the commissioners were in attendance including Professor Clive Thomas, the new Chairman of GuySuCo. GuySuCo top executives Mr. Errol Hanoman and Mr. Paul Bhim also attended the meeting.
On Monday, August 3rd, 2015, the commission will be meeting with officials of the workers’ unions in the sugar industry – Guyana Agricultural and General Workers Union (GAWU), Guyana Labour Union (GLU), National Association of Agricultural, Commercial and Industrial Employees (NAACIE).
Later that day, the Commission will be meeting with the Head of the Private Sector Commission, Major General (ret’d) Mr. Norman McLean and Mr. George Allen, a former GuySuCo executive, who in recent years has been working in the Jamaican industry will also address the commission.
On Tuesday, August 4th, 2015, the commission will meet with Dr. Yesu Persaud, former head of Demerara Distillers Ltd (DDL) and former Deputy Chairman of GuySuCo. Dr. Yesu Persaud now heads the Consultative Association of Guyanese Industry (CAGI).
Other persons who are expected to address the Commission include the Chief Fisheries Officer, Mr. Denzil Roberts and Dr.Oudho Homenauth, Chief Executive Officer, National Agriculture Research and Extension Institute (NAREI) and an official from the livestock division. Mr. Christopher Ram will address the commission at a date to be mutually agreed upon.
Persons who shared thoughts with the commissioners on Thursday last included Mr. Yusuf Abdul, General Manager, GuySuCo Technical Services and Mr. Jairam Pitam, former Human Resources Director, GuySuCo.
With the commencement of the second crop, commissioners have resumed visiting the estates.