Caribbean leaders meet in Kingston over new sugar market realities

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With a looming threat to the sugar industry in the Caribbean on the horizon, regional leaders and policymakers will, over the next two days, gather to inform and facilitate an in-depth discussion of how the Caribbean sugar industry now needs to adapt to the new market realities and the policy options.

The two-day meeting in Kingston, Jamaica, on March 23-24, organised by the Sugar Association of the Caribbean, Caricom and other regional and international partners, including the Caribbean Council, is primarily expected to address changes that will take place this October which will see the European Union abolish national sugar production quotas in Europe.

Analysts believe that for high-cost Caribbean producers – Guyana, Barbados, Belize and Jamaica – and almost all of the smaller cane producers in the African, Caribbean and Pacific Group of States (ACP), this potentially spells the end of the EU market, as EU beet farmers who have previously been restrained by quotas expand production and take advantage of much improved yields and industry consolidation to sell without restriction across Europe and export.

The meeting is also expected to address the challenge that arises out of the United Kingdom’s 2016 decision to leave the EU. Britain is expected to notify the EU formally of this later this month.

For the Region, which still exports much of its sugar to the UK for refining, the issues involved are likely to prove complicated to address. This is because Europe’s new sugar regime will apply to the UK until 2019 when it is expected to separate formally.

The EU’s quota management for sugar will end on September 30, 2017 and is expected to lead to a fall in prices towards the international sugar price and a decrease in sugar imports from the ACP, with particular impact on Caribbean producers.

Sugar Association of the Caribbean Chairman Karl James commented “with our exports still focused on EU markets, the Caribbean sugar industry faces a period of instability and change, and must urgently adapt in order to meet the challenge of competing with other sugar-producing nations worldwide which have lower production costs in a global market heavily distorted by trade barriers and Government support”. He said the prospect of the exit of the UK from the EU further added to “the uncertainty ahead”.

Convened with the advice and support of the Caribbean Council, the Caricom Secretariat and JAMPRO, the regional workshop has been funded by the EU, the UK’s Foreign and Commonwealth Office, ASR Group, and the Inter-American Development Bank.

“The focus must be on identifying the practical next steps that we, the industry, and our Governments can take as priority measures to reinvigorate our sugar sector and provide it with the means to prosper and grow in the 21st Century,” he said.

The recommendations of the industry workshop will be presented to the Sixth Meeting of Caricom stakeholders on sugar, which will be convened by the Caricom Secretariat and take place on March 24 immediately after the workshop.

 

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