Sugar Start Will Be Challenging
Last night, we showed you the late-breaking developments in the sugar industry that have resulted in an agreement for a new start date for the 2021/2022 Crop Season.
Yesterday, the SICB Chairman, Marcos Osorio, emerged from an urgent meeting of the stakeholders to announce that somehow, the Briceno Government managed to broker a temporary truce between the BSCFA and BSI/ASR. He characterized it as an interim agreement between these two business partners that will replace their expiring contract.
But, sources tell 7News that while the SICB is characterizing this resolution as an interim agreement, the millers view it as an extension to their current contract, which expires on January 19, 2022. You may consider that distinction as nit-picking, but we are told that it is important because GOB has allegedly promised not to interfere any further after April, when the extension deadline arrives.
The letter from Prime Minister John Briceno to the leadership of both organizations says, quote, "...So far, the parties have not reached agreed terms for a new long-term agreement... To avoid the risk of uncertainty my Government proposes the following:
- That the parties agree that the terms and conditions set out in the current Commercial Agreement will continue to apply to the delivery and processing of sugarcane for the... crop on an interim basis signed;
- That the parties will engage in good faith negotiations... with a view to concluding a new commercial Agreement before the 30th April 2022;
- That if a new commercial Agreement is not concluded before the 30th April 2022 then the interim agreement will expire;
- If the interim agreement expires, only Associations and registered cane farmers who have signed commercial agreements with BSI will be permitted to deliver sugarcane to the mill." End quote.
And while that intervention has resulted in a last-minute course correction for the industry, there are several challenges that are expected to come with this new season's start. Firstly, there will be a 1-week delay, especially with good weather conditions.
Next, the mill will be operating at half of its capacity. That's because one of the factory's boilers is receiving an upgrade. That 50% capacity will last for the first 4 weeks of the season when there is a large quantity of ripe cane waiting in cane fields. Yesterday, the SICB Chairman appealed to the leaders of all reaping groups to proceed with patience, understanding, and an appreciation that everybody wants to deliver their cane:
Marcos Osorio - Chairman, SICB
"There will be a huge challenge in terms of the harvest and delivery because of how the harvesting groups are formed. The harvesting groups are formed according to the size of their transport unit. For example, a harvesting group that has a transport unit with a capacity of 18 tonnes, that harvest group leader is making sure that he gets the tonnage required for him to be able to deliver 18 tonnes daily to the mill. But, that's when the factory is operating at full capacity. What we will start with, at least for 4 weeks, is that this same group will now only have, of the 18 tonnes, he will only be able to deliver 9 tonnes because the mill will be operating at 50%. So, the big question about the factory readiness, yes, they're ready to start but to start at 50% or half capacity. We know there will be huge challenges, especially when we think of farmers in the Corozal District, who are farther from the mill, and they have to - well, we estimate that association leaders will be working closely with their harvesting groups to ensure maybe what we'll need to institute is 50% of the harvest groups delivered today, the other 50% delivered tomorrow; they go rotating until we are over these 4 weeks into the crop when the capacity of mill goes to its100%. If a group decides, I have 18 tonnes, and even though the mill is at 50%, I will still take my 18 tonnes, and everybody wants to take their full percentage, then we will simply be found in a situation where we will have huge - then that will bring losses indeed to quality because then, it will be taking 2 to 3 days for them to be able to deliver that load of cane. So, we hope, given that the farmers - and especially the associations which have been saying we're ready to start - everybody wants to start - that they are fully aware that starting the deliveries at 50%, what it means, and what each harvesting group needs to do."
Our news team will be at the Tower Hill Factory on Monday for the start of those deliveries, and we'll tell you all about it on our Tuesday Newscast after the Christmas Holiday Weekend.