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#509041 - 11/11/15 04:40 AM Sugar Cane Int値 Prices Down: Threatens Local Industry
Marty Offline
Right now, the Sugar Industry is bracing for what is expected to be a tough season, which should start sometime later this month. The price of sugar, and the corresponding price that farmers get paid for their cane, has fallen by 21% when compared to last year's number, and so the farmers may end up losing money if the prices don't improve throughout the year.

BSI/ASR released their estimates for sugar in the next upcoming weeks put the price at $41.56 per tonne of cane that they are proposing to pay to farmers. It's based on the price of sugar in the European Union's market. That's $11.44 less than last year's initial estimate which was $53 dollars.

At first glance, it might not look like much but the farmers are getting a 21% decrease in earnings, which cuts deep into their profit margins. Factor in that they have their debts to pay and a 20% cut in their budget is heavy blow.

All of this is happening before 2017 when the preferential market status that Belize enjoys as an ACP member country officially expires. Beet Sugar production will compete directly with Sugar Cane, and so the price will be driven down even further.

The EU market prices will be standardized to reflect the world market prices, and this year's decrease is a step towards that leveling of the playing field. But, to the farmers, all they are worried about is their bottom lines and their bank loans. And so when the announcement went out, waves of concern started to radiate in the north. To ensure that rumors and misinformation do not run rampant at this early stage, 2 of the principals of ASR/BSI made an impromptu appearance on Centaur Television's morning show called Despierta Belice. Here's an excerpt of what they say to the radio listeners and tv viewers tuned in:

Belizario Carballo - CFO, ASR/BSI
"We already been seeing a price reduction in the EU market from last year. We were protected from those lower prices that obtained in the EU market last year as a result of the contract that we had that extended up to the 2015 crop. But from last year there was a drop in the EU market for several reasons and we can touch on those later in the show. But there was a drop in the EU market price below the minimum price of 4.25 Euros that were in a sense guaranteed under the previous contract that we had with Tate and Lyle that extended up to the 2015 crop and so from last year we were sensing the developments. We were seeing the developments actually in the EU market. What was anticipated would have occurred in 2017, where everybody knows that 2017 there would be significant changes in the EU market with the lifting of the restrictions of production of sugar. There is expected to be more production in Europe and more sugar available in Europe and therefore the price would have fallen. But those prices started to fall from last year and into this year as well and like I said that impact we were cushioned/sheltered from that impact because of the contract that we had, that provided a minimum price and I think Mac mentioned it several times in this show that we were actually getting paid about 100 Euros more than what the price in the market was. All of that plus a number of other factors combined to make last year's price $75 in that range. Compare to this now price estimate, which now reflects the prices that are prevailing in the EU market, because it's now a new contract and the new contract essentially provides for us to receive the average price that Tate and Lyle Sugar is able to purchase sugar from ACP countries like Belize. In other words countries who can import or export sugar into Europe at duty free terms. The average of that price will be what the contract will provide for."

Mac McLachlan- VP, International Relations, ASR Group
"Can I just make something very clear this morning? That price is the market price in Europe. Sugar is a global commodity and it's a commodity price. It's not something that BSI controls. It's not something the government controls. It's not something the Cane Farmers Association controls. It's a market price. For the last two years now we have been running the industry collectively of the likely impact that changes in the EU sugar regime are going to have and these changes will affect all sugar producers who have enjoyed preferential access in the EU market in the past. The same conversations are taking place in Jamaica, in Guyana, in Barbados as are taking place here. We have been working with the association and with the government on a strategic development plan to look at how we can improve the competitiveness of Belizean sugar. So that in the final analysis, that sugar will be competitive even at the global market price. Today and for this crop, the price receive in Europe are still high from the global market price which is extremely low. I just want to be very clear that this price is not something anyone controls."

Now, while ASR/BSI estimates $41.56 per tonne of sugar cane, the reality of the farmers is that they will actually only be paid $35.33. It gets a bit technical at this point, but the agreement between the cane farmers and the factory owners is that the first payment for all cane delivered is 85% of the value, which works out to $35.33. They will get a second payment 5 weeks after the crop ends, which is 10% of whatever the new market price is at that time. If this price increases from the current $41.56, then the farmers will get paid more. If it decreases, then they will get less. Then, the last 5% will be paid the farmers based what the final prices are after all the sugar is sold on the European and local markets. That comes a few weeks before the start of the next season. So, for the farmers to weather this difficult time, they need to deliver high quality cane, and the market prices will have to increase.

We're told that this afternoon, representatives of ASR/BSI met with executives of the Belize Sugar Cane Farmers Association, and one of the interim measures they are hoping to take is to approach the Prime Minister. They are hoping that the Government will be willing to consider an increase in the prices of local sugar to help mitigate the difficulties from these low European prices. We'll keep following this developing story.

Channel 7

#509066 - 11/12/15 05:02 AM Re: Sugar Cane Int値 Prices Down: Threatens Local Industry [Re: Marty]
Marty Offline

Last night, we told you how the low international prices of sugar may threaten the local industry. The cane farmers are heavily invested, and they have loans at the bank to service.

Today, our News team travelled to Orange Walk to speak with a few of the farmers to get a first-hand perspective on the loss of earnings that could come out of the next sugar season. Daniel Ortiz has that story:

All these sugar cane stalks, tall and numerous, belong to cane farmer Marcel Gutierrez, They're about ready to be harvested, and Guiterrez and his family have been preparing for the opening of the new season which should take place later in this month.

This is a huge investment for him and his family, and the only way of life he’s known for the past 22 years.

He says the problem with the 21% pay cut that’s been announced is that he won’t get a return which will allow him to pay his loan to the bank which financed his cane fields.

Marcel Gutierrez - OW Cane Farmer

"I made a loan this year the differential price will be good and not be good. For approximately the next year I will can't clean my cane fields, not fertilize, nor pay my workers to clean the cane because it will be a very low reduction of price. And it's very hard with me and family to survive on this low price of cane."


"If this price continues into the following crop, do you see yourself continuing as a farmer?"

Marcel Gutierrez - OW Cane Farmer

"Well actually it’s very hard because I will not have the privilege to borrow from the banks because I am already in debt to the bank and I cannot pay all my debt to the bank. I will stay with an amount of loan from the bank and I actually will not want to go sort again in the bank and go a loan because my loan will be up very high and I will not afford to pay that."


"Some farmers are saying that they may have to depend on other sources for income; probably other family or their sons, daughters working it out as a family. Do you have any other means to be able to meet your debt?"

Marcel Gutierrez - OW Cane Farmer

"Well to pay my debt, nope. Because this is the only way I pay my loans to the bank. I do not have any other kind of source to pay my debt."

Daniel Ortiz

"So you are a career farmer who's about to lose his business."

Marcel Gutierrez - OW Cane Farmer

"That's right."

According to the chairman of his branch, Alfredo Ortega, the area of impact due these reduced sugar prices will be widespread within the Cane Farming Community.

Alfredo Ortega - Chairman, BSCFA OW Branch

"The situation is that after the second payment the farmers go and make their loans with their different institution they work with. And based on assumptions that the institution believe will be the upcoming price for the upcoming crop; then based on that commitments are made by the farmers on what will be their repayment potential. The burden on this situation will affect highly mostly the biggest farmers because they are the ones more indebted to the commercial institutions. Across the board it has a negative effect but it has a huge, very huge upon those farmers that are highly indebted to the commercial institution."

Daniel Ortiz

"Is there any fear that farmers might lose their farms? Might not be able to support themselves because the prices are so low?"

Alfredo Ortega - Chairman, BSCFA OW Branch

"Yes there is a situation that can happen. What this price is doing is pushing the farmers five steps further to poverty. We have been in poverty and with this situation it’s chasing the farmers. And not only the farmer but also those people who are depending on the crop. Those people who are there doing the necessary husbandry at the cane field level. This situation will really put a negative impact to the cane farming community and it will chase us to a poverty situation if nothing is being done."

Yesterday, one of the spokespersons for factory owners made the point that everyone within the industry - including the BSI/ASR - stand to lose money for this crop.

As we told you, the cane farmers and the factory owners are debating a decision to approach the government and ask for an increase in the local prices for sugar. This would provide some relief to the farmers – but you’d have to pay for it – and successive government’s have been reluctant to increase the price of such a basic necessity.

Still, the chairman of the Orange Walk Branch of the Sugar Cane Farmers Association says that he hopes that this time around, the Government will decide in the farmers favour and grant this price increase:

Alfredo Ortega - Chairman, BSCFA OW Branch

"This is an issue that has been placed on the table from long before in regards to the increase seeking and the increase for the local price. We have been asking for that increase because we have seen that most of our sugar; our local sugar has been smuggled between Mexico and Guatemala through an illegal form. Because of the prices we have here and we can also say to produce 1 ton of white sugar it really takes more than 1 ton of raw sugar. So the farmers are subsidizing the creation of white sugar. When we see the price of pound of rice increase, the price for beans, for flour, everything has increased. But we have remained at this price for the past 15 to 20 years; 50 cents on the shelf because buying from BSI is about 42 dollars per bag of sugar. We have been asking the government to increase this price so that farmers can have at least a little bit of pillow in regards to dollars per ton of cane. A math was made that if the price for a pound of sugar is increased of 25 cents, farmers are able to get 5 dollars per ton of cane delivered; so that is something that was charged to the chairman of the board 2 years ago; the SICB board. That he look forward into garner all the information and present it to the cabinet and it was done. When it reach to the cabinet, the information that was send over to us that cabinet was not prepared to give an increase to the ton of sugar."

We’ll have more on this issue in tomorrow’s newscast, when another veteran cane farmer will explain why he is in jeopardy of losing his cane field as well.

And while the sky does seem to be falling in cane country – for context we note that last year the price per tonne started out at fifty three dollars and ended up at a robust 75 dollars per tonne.

Sugar, Are The Sweet Days Done?

For the past 2 nights, we've been telling you about the difficulties that the local Sugar Industry is expected to have because the international prices for sugar in Europe are low. Most of our coverage has been focused on how the farmers will be negatively affected, but tonight, we have the perspective of the factory owners.

First though, the Chief Finance Officer of BSI/ASR explained to our colleagues that even though the European Prices started to decrease from last year, local industry in Belize didn't feel pinch because a contract with Tate & Lyle Sugars in London. He said that this contract ended this year and the re-negotiated deal now reflects what the prices are now, in real time, instead of the UK company absorbing the difference. Here's how Carballo explained it:

Belizario Carballo - CFO, ASR/BSI
"We will be seeing this year a reduction in prices that we get from the EU market which remains our most beneficial market. The level of preference is significantly reduced, but at this point in time it is still better that say the world market, which is our other alternative for selling sugar - exporting sugar. Belize as a country unfortunately has a very small local market. Roughly about 10% of pour production is sold on the local market. Which means that 90% of our products is exported and therefore we are heavily exposed to prices that prevail in those export markets. Of those exports markets, the EU market is most beneficial and is one to which we sell close to 80% of our production. The other 10% of exports would go to the USA market. But the USA market is limited to a quota of 11,000 tons. So we can't sell more than 11,000 tons in any pone crop to the United States market. The EU market is still our best market. The prices we are estimating we will received from that market is still higher than the world market price at this time. Clearly we will sell to the better price markets and that is why we are still estimating that we will sell to the EU market for next crop. Now the prices that we will see for the 2016 crop are much lower than those which we sell for the 2015 crop. Although from 2015 we had seen a drop in EU market price. But Belize was protected from the impact of that decline in the EU market price because we had a contract with Tate and Lyle Sugars which established a minimum price of 425 euros. So although the market price was trading close to 100 euros below that minimum, we still got paid that minimum price and so we were protected from that impact. That contract came to an end this year and the new contract that we have in place from 2016 crop onwards is based on the average price that Tate and Lyle Sugars purchases sugar from ACP countries like Belize."

So, how will this affect the millers? Well, Carballo said that the Belize Sugar Industries Limited will have to take the same hit that the farmers are preparing for:

Belizario Carballo - CFO, ASR/BSI
"Clearly, this situation with the lower prices is disappointing for everyone. Not only for farmers, but for millers as well and the general economy. It is one that will be very difficult to manage. I think this year we will all be in a very difficult situation both farmers at the lower prices and ourselves, because the farmer price is indicative of 65% of the revenue pool and if the 65% is low, clearly our 35% will also be lower and so we all have to find ways in which we can survive and pull through. That is why we have been speaking for some time now about the need for a strategic development plan, because that plan will allow us to collectively come together and determine what all of us will do. Because it is not sufficient for the farmers to do something independent of the others."

The tentative date of the start of this year's crop is Monday, November 30.

Channel 7

#509328 - 11/21/15 04:53 AM Re: Sugar Cane Int値 Prices Down: Threatens Local Industry [Re: Marty]
Marty Offline

Cane Farmer Associations Beg For Better Price: BSI Says No Go

Last week, we reported on the difficult times that the local sugar industry is going to have to fight through because prices for sugar are low in Europe right now. The factory owner, ASR/BSI, has released the preliminary price estimates for this year' crop at $41.56 per tonne of cane, which is a 21% decrease from last year.

At this price, the farmers are very concerned that they will not be able to get a return on their investment, much less pay their loans to the bank. They're not convinced that BSI's estimate accurately reflects the market status in Europe. So all 3 Associations, the Belize Sugar Cane Farmers, the Corozal Sugar Cane Producers, and the Progressive Sugar Cane Producers, wrote to the Deputy Prime Minister and BSI earlier this week. They asked that BSI adjust the figure, so that the farmers could get another 5 dollars per tonne of cane delivered.

On Wednesday, the CEO of the Belize Sugar Cane Farmers Association told our colleague from CTV3 News about this joint letter:

Oscar Alonzo - CEO, BSCFA
"The 3 associations met to discuss this situation about the cane price estimate, which in deed has been one of the lowest for the past several years. Collectively we are not happy and a letter was signed jointly by tem directly to the Deputy Prime Minister and the Minister of Agriculture to try to see if BSI can: 1) revised some of the assumption it has use in determination of the price estimate. They can enable the farmers to get at least $5 - $6 more in the first cane payment. We already sent our proposal to BSI separately as BSCFA. But now we have put it in this joint letter to the DPM. Also other measures are being considered which includes in the price of sugar sold on the local domestic market. Because we know that the low price we have compared to the high price in the neighboring countries in only stimulating contraband of our product of which the cane farmers and even the manufacturers are not benefitting. We have indicated in that letter that a minimum increase of about 25 cents per pound of sugar to be considered."

Courtney Weatherburne
"Which is something that you all have been asking for quite some time."

Oscar Alonzo - CEO, BSCFA
"Yes, we have been asking for it. But as you know, I think sugar has been one of the staple commodities in Belize that has received the least increases the past. They have more given increases for beans, rice, flour and all of these other staples. But in the case of sugar, I think has been more than 10-15 years that no increase has been given for the price for sugar on the local market. We are seeing that the stock of sugar is diminishing now. Once it was a surplus, but now it's diminishing. The deficit is lowering, so there is more demand for it. Also there has been a rebound in the price of sugar, so we feel that there is room for the company to consider a reasonable increase in the price, so that the farmers can get a better 1st cane payment. Because this will affect them disastrously."

BSI's Chief Financial Officer, Belizario Carballo has written back all 3 associations in a very detailed 4 page letter basically telling them that no adjustment to the current cane that is possible. He explained each variable in the European market which BSI has measured, and why their prediction is accurate, and how it ties in with the sugar prices. It ends off by assuring the executive members of the 3 associations that if the price changes over the course of the sugar season, the farmers will benefit fully from it.

Channel 7

#509396 - 11/24/15 05:25 AM Re: Sugar Cane Int値 Prices Down: Threatens Local Industry [Re: Marty]
Marty Offline

Caneros Seek Increase in Cost of Locally Sold Sugar

The B.S.C.F.A. held its Annual General Meeting on Sunday where key agenda items included the passage of a resolution to seek an increase in the cost per pound of sugar sold on the local market. According to Alonzo, all efforts are also being made to commence the 2015/2016 crop on time to avoid a recurrence of previous late starts.

On the Phone: Oscar Alonzo, Chief Executive Officer, B.S.C.F.A.

鄭t the meeting that we had yesterday, the Annual General Meeting in which one thousand, one hundred members attended, a resolution was passed to the effect that farmers are asking to increase the price of domestic sugar. So those are some the [issues.] That is where we are right now and we are still awaiting a response from the Deputy Prime Minister. B.S.I. has responded to the joint associations letter and it maintains its position of not increasing the working average price estimates and reiterating the justifications we had made in the original letter of requested price payment.

Isani Cayetano

哲ow Mr. Alonzo, if by any chance the outcome of this negotiation, if I may, is not favorable. Will this any at all affect the opening of the crop or the start of the crop?

On the Phone: Oscar Alonzo

展ell, the associations want the crop to start on time. We don稚 a repeat of the last two years. Although at the meeting yesterday some members had made reference to stronger action being taken to try to see if the company can increase its first cane price estimate. The situation is basically that the company is saying okay, during the course of the crop this price is revised, okay, and then once the price increases on the world market then the farmers will be able to gain that benefit through the second payment and the final payment. But the problem is that the farmers are tied into this first payment for the entire period of the crop and will not benefit from any increase in the price of sugar on the world market.

B.S.I. notes that the estimated cane price was based on fair assumptions, but emphasized that any improvement realized during the crop would be fully accounted for and paid to farmers in the second and third payments for the 2016 crop.

Channel 5

#509452 - 11/26/15 05:27 AM Re: Sugar Cane Int値 Prices Down: Threatens Local Industry [Re: Marty]
Marty Offline

Cane Farmers seek Government bail out

vlcsnap-2015-11-25-15h52m45s247The Belize Sugar Cane Famers Association BSCFA held their annual general meeting in San Roman Village, Corozal where one of the key items on the agenda was the sugar price for this upcoming crop season. Following the drop in world sugar prices, BSI/ASR wrote to all three cane farmers associations including the BSCFA making clear the grounds for the first cane price estimate which is set for thirty five dollars for the upcoming crop season. The associations responded asking for a review of the estimates in hopes of increasing the original first payment. BSI reiterated its position saying the prices are based on figures set by the European Union. As a vlcsnap-2015-11-25-15h52m56s105 result, a joint letter from all three sugar cane farmers associations was sent to the Minister of Agriculture Honorable Gaspar Vega and copied to the Prime Minister asking the government to intervene. We spoke to the Chief Executive Officer for the BSCFA Oscar Alonzo, who detailed some of the measures proposed to the Government to increase the profit margin from the sale of sugar cane.

Oscar Alonzo, CEO BSCFA: Well as you know we’re trying to see what measures could be taken to improve the payment that the farmers get for their sugar especially now since the 1st payment is very low at $35.33. The 1st measure that we proposed was that it could be done from a company basis where they review their assumptions on which they calculated the price. We refer to three factors there that they could look at that they could give room for an increase in the price. The other measures have to do with the actual price of sugar that is sold on the domestic market. If you will notice, sugar is the only commodity in Belize that has not been given a price increase for the past 10-15 years. Flour, beans, rice, have always been in different points in time over the last few years have been given price increases. We’ve also asked government to review its policies regarding various inputs that are required because the cost of production is high. The cost of fuel, the cost vlcsnap-2015-11-25-15h53m05s182of fertilizer, the cost of spare parts, the cost of machine services, seeds. Keep in mind that BSI vlcsnap-2015-11-25-15h52m50s43have a development concession that gives some lee way in order to make their cost more cost effective. The farmers have minimal, they have some. I think we don’t pay the import duty and the GST. But there is a need for the review of these policies to see what assistance we need.

With these measures , BSCFA says they hope to increase the profit margin by at the very least, five to six dollars per ton of sugar cane.


#509559 - 11/30/15 01:39 PM Re: Sugar Cane Int値 Prices Down: Threatens Local Industry [Re: Marty]
Marty Offline

Sugar price raised

The first estimate for prices of raw sugar cane was released earlier this month. Producers American Sugar Refining/Belize Sugar Industries Limited ASR/BSI) have estimated a price of $41.56 per ton, with some 1.225 million tons of cane available from which BSI expects to mill 129,000 tons of sugar. Of course this did not sit well with the farmers who have thousands invested in their sugar cane fields. The associations sent a tripartite letter to BSI requesting that the estimate be revisited but the millers reaffirmed their position saying that is the price reflected by the sugar that arrived in Europe in 2015 and that readjusting the estimated first payment is well beyond them. The farmers have since been appealing to the Government seeking other avenues by which they can increase their profit margins even if by the slightest bit in order to weather this storm. That led to a meeting at the Sugar Board between the Minister of Agriculture, Deputy Prime Minster Gaspar Vega and representatives of the three farmer associations. Coming out of the meeting was an increase in the locally sold sugar as announced by Hon. Vega.

Hon. Gaspar Vega, Minister of Agriculture: Today, I think that was one of the most important lobbying that was being done and I want to announce that the way the government did approve the 25c increase per pound for our locally consumed sugar. Some people thought that it could probably be even more because of the price on the sugar in our neighboring countries which is Mexico and Guatemala and even at 75c per pound; we池e still lower than the price sold in other countries.

Reporter: When will it come into effect? What all needs to happen for that to be imposed?

Hon. Gaspar Vega, Minister of Agriculture: Well as we speak, both CEO and I are looking into getting the SI ready, sending it to the attorney general so that it痴 approved and made law and hopefully we will be able to do that pretty quickly.

Vega explained how this affects the overall price that they get during their first payment.

Reporter: And in terms of the first price for farmers, is there any realistically that government can do?

Hon. Gaspar Vega, Minister of Agriculture: Well we have increased the price on local sugar. That will assist them that should be giving them something like $4.60 more per ton. So instead of 33, they should probably get another $3.00 because $4.60 at the way it works, BSI only pays a percentage upfront. You have to remember that ASR does not collect for the sugar until it痴 sold so the first payment that they make is not money that they have collected from sugar they will be selling. They either have that in a saving, which I doubt, or they have to make a loan. So those are the challenged that the industry has to learn about.

This year痴 Crop Season is expected to commence in the first week of December.



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