President defends decision to keep GuySuCo afloat despite unprofitable production cost

Last Updated on Thursday, 14 November 2024, 20:37 by Writer

President Irfaan Ali on Wednesday sought to justify his People’s Progressive Party Civic’s (PPPC) administration to keep the limping state-owned Guyana Sugar Corporation (GuySuCo) operational in its present form, although the US$1.31 per pound cost of production exceeds the selling price of US$0.35 cents per pound.

“We cannot look at sugar only from that measurement that you used because there are tremendous other impacts of sugar that is non-book financial but more economics so there is something called financial viability and economic viability,” he said. The President further contended that government’s investment was not only about the sugar workers but also for the economic support, drainage and health facilities.

In 2022, the production cost was 62.22 US cents per pound from 42.84 US cents per pound in 2021 and 28.41 US cents in 2020.

The opposition has over the years accused the PPPC of pouring money into the sugar sector to appease sugar workers most of whom are perceived as PPP supporters. In his response to a question during an interview with several media workers, the President did not respond to the political motivation behind funding GuySuCo, but said “the objective is to work to reduce the cost of production.” He said the gas-to-energy project was also expected to contribute to a reduction in the cost of production.

“There is a high cost of production now because of the capital that is required to bring back the industry to where it is today,” he said. Saying that the cost of production was linked to current and capital expenditure, he added that the corporation needs t0 take steps to ensure that it is run properly. “We have to fix that so we have to invest in improving efficiency, creating higher yields and also reducing the cost of production,” he said.

The government had previously said that new high-yielding sugarcane varieties were being brought from neighbouring Brazil, and there was a likelihood of some being brought from Cuba.

He said that developed nations were also subsidising a number of their crop production, even resulting in quantities being discarded.